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Markets turn negative as US slaps tariffs on EU, Canada and Mexico steel Trade war looms as Trump hits EU, Canada and Mexico with tariffs – live
(35 minutes later)
And from the Guardian’s political correspondent Jessica Elgot:
A UK government spokesman said they were “deeply disappointed” by the outcome.
“The UK and other European Union countries are close allies of the US and should be permanently and fully exempted from the American measures on steel and aluminium,” the spokesman said. “We have made clear to the US government at the highest levels the importance of UK steel and aluminium to its businesses and defence projects. We will continue to work closely with the EU and US Administration to achieve a permanent exemption, and to ensure that UK workers are protected and safeguarded.”
May will raise the tariffs with Trump directly when the pair meet at the G7 in Canada next week, where the issue is likely to figure prominently. May has personally lobbied the US president repeatedly in recent weeks and months.
Guardian’s Daniel Boffey from Brussels: Brussels has been preparing a retaliatory hit on an array of US goods, both industrial and agricultural, ranging from Harley Davidson motorbikes to blue jeans and American bourbon. Ambassadors from the 28 member states were in immediate communication with the European Commission following the announcement from the Trump administration. Speaking at a conference in Brussels, Juncker said the EU would launch retaliatory action “in the coming hours”. “This is a bad day for world trade,” Juncker. “It’s totally unacceptable that a country is imposing unilateral measures when it comes to world trade. What they can do, we are able to do.”
Susan Danger, chief executive of the American Chamber of Commerce to the EU (AmCham EU), said the White House did not have any justification for imposing the tariffs.
“American companies in Europe oppose the US government’s decision to impose tariffs on EU imports of steel and aluminium. We urge the US government to revisit its plans and the EU to take a balanced approach in responding to these measures. We are very concerned by the damage a tit-for-tat dispute would cause to the transatlantic economy and its impact on jobs, investment and security across the Atlantic.”
Mexico’s Undersecretary of Foreign Trade, Juan Carlos Baker, tweeted:
Mexico decisively rejects any unilateral, protectionist measure that distorts trade.
Ramón Beltrán, the president of Mexico’s National Chamber of the Aluminium Industry, told ‘Aristegui En Vivo’: “Nobody will win [the trade war that is beginning]. The US will lose.”“Frankly, we do not like this at all,” Beltrán added.Beltrán claimed the US move was designed to pressure Mexico over NAFTA negotiations. “[But] we shouldn’t contaminate one thing with the other.”
Mexico’s Secretariat of Economy said it “profoundly regretted” the US move and announced it would hit back with tariffs on products including including grapes, apples, pork legs and shoulders, blueberries, some cheeses as well as flat steel. “Mexico has repeatedly made clear that these kinds of measures based on national security are neither appropriate nor justified,” the secretariat said in a statement.
The former Belgian prime minister, and leader of the liberals in the European Parliament, Guy Verhofstadt, said: “Unfortunately, these steps weaken the transatlantic alliance. Instead of imposing punitive tariffs on their closest allies, the US and EU should work together to tackle China’s unfair trading practices.”
He continued: “As with Brexit, what is most important now is unity within the EU. If we are united, we will have a strong position to face this wave of protectionism, which will benefit no one. The EU has proven to be a strong and reliable global trading partner. In recent months, the EU secured major free trade deals with partners like Canada, Japan and Mexico. This shows what we can achieve when Europe speaks with one voice. We need to continue in this spirit and work with partners around the globe to preserve the rules-based multilateral trading system.”
In his statement, EU commission president Juncker said:
“I am concerned by this decision. The EU believes these unilateral US tariffs are unjustified and at odds with World Trade Organisation rules. This is protectionism, pure and simple. Over the past months we have continuously engaged with the US at all possible levels to jointly address the problem of overcapacity in the steel sector. Overcapacity remains at the heart of the problem and the EU is not the source of but on the contrary equally hurt by it.
Markets are down. US equities fell on the news, with the Dow Jones industrial average dropping 250 points. Mexican stocks also fell, while the Mexican peso and Canadian dollar hit their lows of the day against the dollar after news of US tariffs broke.
Author and historian Simon Schama has also weighed in, posting on Twitter that “Europe now has to show some real spine or else it will just become Trump’s doormat”.Author and historian Simon Schama has also weighed in, posting on Twitter that “Europe now has to show some real spine or else it will just become Trump’s doormat”.
After the sabotage of the Iran deal; Europe now has to show some real spine or else it will just become Trump's doormat https://t.co/KX1j31hY5mAfter the sabotage of the Iran deal; Europe now has to show some real spine or else it will just become Trump's doormat https://t.co/KX1j31hY5m
The president of the European commission, Jean-Claude Juncker, has issued a statement and commented on Twitter: “It’s a bad day for world trade. US leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of US imports. We will defend the EU’s interests, in full compliance with international trade law.”The president of the European commission, Jean-Claude Juncker, has issued a statement and commented on Twitter: “It’s a bad day for world trade. US leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of US imports. We will defend the EU’s interests, in full compliance with international trade law.”
It’s a bad day for world trade. US leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of US imports. We will defend the EU’s interests, in full compliance with international trade law. https://t.co/J3wPW5Ew7K pic.twitter.com/aDlOWcSgRvIt’s a bad day for world trade. US leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of US imports. We will defend the EU’s interests, in full compliance with international trade law. https://t.co/J3wPW5Ew7K pic.twitter.com/aDlOWcSgRv
Markets have edged into negative territory despite earlier rises on hopes of a resolution to the Italian political crisis.Markets have edged into negative territory despite earlier rises on hopes of a resolution to the Italian political crisis.
The moves came as the US imposed steel and aluminium tariffs on the EU, Mexico and Canada. Investors are also fretting about other geopolitical problems, including Friday’s vote of no confidence in Spain, the continuing concerns about North Korea and Iran, the prospect of a trade war between the US and China.The moves came as the US imposed steel and aluminium tariffs on the EU, Mexico and Canada. Investors are also fretting about other geopolitical problems, including Friday’s vote of no confidence in Spain, the continuing concerns about North Korea and Iran, the prospect of a trade war between the US and China.
Italy’s FTSE MIB is currently down 0.13%, while Spain’s Ibex is 0.2% lower and Germany’s Dax is down 0.75%. France’s Cac has managed to edge up 0.03% while the FTSE 100 is 0.18% higher. On Wall Street, the Dow Jones Industrial Average is down 145 points or 0.62%.Italy’s FTSE MIB is currently down 0.13%, while Spain’s Ibex is 0.2% lower and Germany’s Dax is down 0.75%. France’s Cac has managed to edge up 0.03% while the FTSE 100 is 0.18% higher. On Wall Street, the Dow Jones Industrial Average is down 145 points or 0.62%.
On the economic front, eurozone inflation came in higher than forecast in May.On the economic front, eurozone inflation came in higher than forecast in May.
UK consumer credit rebounded in April, as the City regulator ordered a clampdown on high cost credit.UK consumer credit rebounded in April, as the City regulator ordered a clampdown on high cost credit.
In the US, consumer spending and weekly jobless claims both came in better than expected.In the US, consumer spending and weekly jobless claims both came in better than expected.
Finally, the Bank of England has appointed academic Jonathan Haskel to its rate setting monetary policy committee, the only man on a shortlist of five candidates.Finally, the Bank of England has appointed academic Jonathan Haskel to its rate setting monetary policy committee, the only man on a shortlist of five candidates.
On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow.
US commerce secretary Wilbur Ross has confirmed that it will impose steel and aluminium tariffs on the EU, Canada and Mexico from midnight tonight.
The tariffs will be 25% for steel and 10% for aluminium. Amid fears of a trade war, Ross said if any party retaliated that did not rule out further negotiations.
He said talks with the EU had made progress, but not enough to continue an exemption from tariffs, which was due to expire tomorrow.
While European markets are still just about holding onto gains in the hope that Italy can come up with a plausible government after the recent turmoil, Wall Street has opened lower on worries about trade wars.
With the US set to impose tariffs on steel and aluminium from the EU, Canada and Mexico, the Dow Jones Industrial Average is down 112 points or 0.4%. The S&P 500 opened 0.28% lower and the Nasdaq Composite has lost 0.08%.
Here’s our story on the appointment of the only man on a five person shortlist to the Bank of England’s monetary policy committee:
The Bank of England interest rate setting committee, which has only one woman among its nine members, will continue to be male-dominated after the Treasury opted to appoint the only man from a shortlist of five candidates.
In a move that immediately sparked protests from women’s groups, the chancellor, Philip Hammond, said Jonathan Haskel, an Imperial College economist, would join the Bank’s governor, Mark Carney, on the monetary policy committee (MPC) for a three-year term starting in September, when he will succeed the outgoing Ian McCafferty.
The Treasury said four women were on the shortlist, but an internal panel made up of two women and one man chose Haskel as the best candidate.
Clare Lombardelli, first female chief economic adviser to the Treasury, chaired the panel. She was joined by the former MPC member Kate Barker and Richard Hughes, the Treasury’s director of fiscal policy.
A Women’s Equality party (WEP) spokeswoman said the appointment of Haskel sent the wrong message- about the Treasury’s commitment to improving diversity in important areas of public life. “It suggests that even if they had an all-female shortlist, they would probably still appoint a man,” she said.
The full report is here:
Shares in troubled Deutsche Bank are down around 5% following reports that US authorities have put its business in the country on a list of troubled institutions.
The Fed designated Deutsche Bank's U.S. business as 'troubled,' in a rare censure that pushed the bank to reduce risk-taking https://t.co/HkAS7QaDob
More signs of the strength of the US economy.
Weekly jobless claims fell by more than expected, down 13,000 to a seasonally adjusted 221,000. Analysts had forecast a fall to 228,000. The jobless rate at 3.9% is a near seventeen and a half year low and close to the Federal Reserve’s target of 3.8% by the end of the year.
The news comes ahead of Friday’s non-farm payroll report, where economists expect around 188,000 jobs to have been created in May.
Meanwhile US consumer spending rose by a higher than expected 0.6% last month, the biggest increase in five months. The forecast was for a 0.4% increase.
Back in Italy:
Lega rushes to cancel signs it was ever in favour of exiting the Euro: “Stop the Euro” sign disappears from headquarters wall. (>70% of Italians would vote to stay in €, polls say) HT @carloalberto https://t.co/SYVqkjLHGH
Meanwhile over in Spain, the no confidence debate is taking place. Our latest report:
The future of the Spanish prime minister, Mariano Rajoy, is hanging in the balance as parliament prepares to debate a motion of no-confidence tabled after his Partido Popular (People’s party) was found to have profited from a huge kickbacks-for-contracts scheme.
A defiant Rajoy addressed MPs early on Thursday, accusing the opposition Partido Socialista Obrero Español (Spanish Socialist Workers’ party) of opportunism and reminding the PSOE of its corruption scandals.
“With what moral authority are you speaking? Are you perhaps Mother Teresa of Calcutta?” he asked. “There have been corrupt people in the PP, but the PP is not a corrupt party.”
The no-confidence vote, scheduled to take place on Friday, is likely to be very close. The PSOE needs the support of 176 of the 350 MPs in congress of deputies. The votes of the five MPs of the Partido Nacionalista Vasco (Basque Nationalist party) will prove decisive, with the PNV saying it would meet and hear what the PSOE leader, Pedro Sánchez, had to say before announcing its decision.
Sánchez called for “democratic regeneration” as he sought the backing of MPs, saying: “Resign, Mr Rajoy. Your time is up.”
The full story is here:
With European markets drifting - but mainly still managing to stay in positive territory - Wall Street is expected to open marginally lower. There is an eerie sense of calm after all the ructions caused by the Italian political crisis, with investors hoping a new government can be formed after all without the need for another election campaign. Craig Erlam, senior market analyst at Oanda, said:
Not too long ago, a coalition government in Italy consisting of two eurosceptic populist parties was a feared and unlikely prospect that many believed would majorly concern investors. While much of this remains true, it is also currently viewed as the least unattractive and feasible outcome for markets, with the other alternative being fresh elections and the possibility that the parties are given an even stronger and potentially less euro-friendly mandate.
Italy’s President, Sergio Mattarella, may have believed he was acting in the best interest of the country when he rejected to populists choice of Finance Minister but the reality is that in doing so, he has given both parties more ammunition with which to attack the euro. Mattarella has already been accused of acting on behalf of Germany and others while Brussels has been accused of interference, it all feeds very well into the eurosceptics message that the country no longer even has control over its domestic politics.
Should the country move straight on to another election, both Five Star Movement and Lega will look to take advantage of any fury linked to perceived meddling and could significantly add to their numbers. All of a sudden, the worst case scenario prior to the election looks tolerable compared to what could come from another. With both parties now in discussions again, there is a hope that the political impasse can be resolved which is helping to lift sentiment in the near-term. That said, a positive outcome now poses many further risks in the long-term.
While Italian assets have bore the brunt of the pain from the latest period of political instability and uncertainty, there has been a negative impact on the wider markets including the euro which dropped to a 10-month low against the dollar. While we’re still far away from the days of the debt crisis and the risk of a breakup, a second election was being portrayed as a vote on the euro which seems drastic and probably overhyped but it certainly hit the single currency.
Markets are still managing to hold onto their gains - just - on hopes that the Italian political crisis can be resolved before too long. Here is our latest report on the developments:
The leader of the Italian far-right party the League, Matteo Salvini, cancelled political rallies to return to Rome early on Thursday, in what was seen as a sign that a weeks-long political impasse that has left the country without a fully-functioning government for months might soon be coming to an end.
Salvini was heading back to the capital to meet with his coalition partner, Luigi Di Maio, the 31-year-old head of the anti-establishment Five Star Movement, after the Italian president gave the pair more time to form a government.
Italian press reports indicated that any agreement to form a new populist government involving the League, formerly known as the Lega Nord, and M5S would include the nomination – again – of Giuseppe Conte, a formerly obscure law professor, to serve as prime minister.
But the two populists, Di Maio and Salvini, were expected to back down on their earlier insistence that the 81-year-old Eurosceptic Paolo Savona, who had called Italy’s adoption of the euro a “historic mistake”, serve as finance minister.
There were also small indications that the populists would try to assure markets that they were not planning any big moves to try to hasten an Italian exit out of the euro, a fear that roiled markets this week.
The full story is here:
Given the controversy over the comments from male executives making excuses for why there are now women on their boards, the fact that the new member of the Bank of England’s MPC is male hardly helps matters.
Worse - the shortlist for the appointment included four women and one man. And the man was given the job. From the Treasury release:
The release also says:
The Treasury is committed to appointing a diverse range of people to public appointments, including at the Bank of England. The Treasury continues to work to attract the broadest range of suitable applicants for posts. As part of this recruitment process, the Chief Economic Advisor at the Treasury and chair of the interview panel contacted 87 potential applicants to inform them of the vacancy, of whom 44 were women.
Bank of England put Jonathan Haskel on the MPC,* 27 applicants in total* Shortlist was Haskel and, er, four women... pic.twitter.com/4T04l6RfnF