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| Markets rattled as US slams China over 'unfair' trade practices – business live | Markets rattled as US slams China over 'unfair' trade practices – business live |
| (35 minutes later) | |
| Despite Kevin Hassett’s claim that Trump’s tax policies are working, America’s trade deficit with China has actually grown this year. | |
| The gap hit $375bn in 2017, and is on rack to exceed this level in 2018 thanks to rollicking imports of China-made technology, electrical equipment, machinery and clothes. | |
| The U.S. is on track to post the largest trade deficit ever with China in 2018. https://t.co/tod7fUe7p0 | |
| Analysts at JP Morgan have warned that the US-China trade war will hurt economic growth. | |
| They told clients: | |
| “We forecast that the US imposes an additional 25% tariff on virtually all goods imports from China early next year. This will drag materially on activity in China and could accelerate the decline in global business confidence now underway.” | |
| One of President Trump’s top economic advisers has suggested there could be a case for “evicting China” from the World Trade Organisation (WTO). | |
| Kevin Hassett, chairman of the president’s Council of Economic Advisers, told the BBC that China had “misbehaved” as a member of the WTO, claiming: | |
| We never really envisioned that a country would enter the WTO and then behave the way that China has. It’s a new thing for the WTO to have a member that is misbehaving so much. | |
| He also claimed that the WTO was failing the US, as it takes so long to rule on trade disputes: | |
| “it takes five or six years and then the damage is done”. | |
| Hassett also claimed that Donald Trump’s hardball strategy on international trade is working. That’s questionable, when the US Trade Representative has ruled that China hasn’t change its policies.... | |
| Hopes of a ceasefire in the US-China trade wars are fading today, after America launched a fresh salvo of criticism at Beijing. | Hopes of a ceasefire in the US-China trade wars are fading today, after America launched a fresh salvo of criticism at Beijing. |
| In a new report, US Trade Representative (USTR) Robert Lighthizer rules that China has not changed its “unfair” and “unreasonable” practices, despite pressure from America and the imposition of tariffs on $250bn of Chinese sales to the US. | In a new report, US Trade Representative (USTR) Robert Lighthizer rules that China has not changed its “unfair” and “unreasonable” practices, despite pressure from America and the imposition of tariffs on $250bn of Chinese sales to the US. |
| The move raises tensions ahead of the G20 meeting of world leaders later this month, where presidents Trump and Xi are expected to discuss the issue. | The move raises tensions ahead of the G20 meeting of world leaders later this month, where presidents Trump and Xi are expected to discuss the issue. |
| Lighthizer’s comments came in an update of the U.S. Trade Representative’s “Section 301” investigation into China’s intellectual property and technology transfer policies. | Lighthizer’s comments came in an update of the U.S. Trade Representative’s “Section 301” investigation into China’s intellectual property and technology transfer policies. |
| The USTR declared that China had not responded “constructively” to the initial section 301 reports. | The USTR declared that China had not responded “constructively” to the initial section 301 reports. |
| In particular, it’s unhappy that the Chinese government has persisted in using foreign investment restrictions to push US companies to share technology and intellectual property with Chinese entities. | In particular, it’s unhappy that the Chinese government has persisted in using foreign investment restrictions to push US companies to share technology and intellectual property with Chinese entities. |
| Lighthizer says: | Lighthizer says: |
| “We completed this update as part of this Administration’s strengthened monitoring and enforcement effort. | “We completed this update as part of this Administration’s strengthened monitoring and enforcement effort. |
| This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation.” | This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation.” |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Global markets are extremely edgy today, as investors fret about global growth prospects, the US-China trade war, Brexit, and Italy’s row with the EU over its budget plans. | Global markets are extremely edgy today, as investors fret about global growth prospects, the US-China trade war, Brexit, and Italy’s row with the EU over its budget plans. |
| Last night, Wall Street suffered one of its shakiest days of the year. The Dow Jones industrial average slumped by 551 points, or 2.2%, to 24,465 points, wiping out its gains for 2018. | Last night, Wall Street suffered one of its shakiest days of the year. The Dow Jones industrial average slumped by 551 points, or 2.2%, to 24,465 points, wiping out its gains for 2018. |
| Technology shares continued their recent losses, with Apple shedding almost 5%. But other sectors also suffered, with retailers Target and Lowe’s both disappointing investors with their latest results. | Technology shares continued their recent losses, with Apple shedding almost 5%. But other sectors also suffered, with retailers Target and Lowe’s both disappointing investors with their latest results. |
| This followed a rough day in Europe, which saw Germany’s DAX hit a new 52-week low. | This followed a rough day in Europe, which saw Germany’s DAX hit a new 52-week low. |
| Economic growth fears also savaged the oil price on Tuesday, sending crude sliding by over 6%. | Economic growth fears also savaged the oil price on Tuesday, sending crude sliding by over 6%. |
| The trading floor chatter is that the long bull market may be fizzling out. | The trading floor chatter is that the long bull market may be fizzling out. |
| Craig Erlam of City firm OANDA says: | Craig Erlam of City firm OANDA says: |
| Another troubling start to the week in financial markets is further denting investor sentiment as we approach the open on Wednesday, with futures currently stable but vulnerable to another tumble. | Another troubling start to the week in financial markets is further denting investor sentiment as we approach the open on Wednesday, with futures currently stable but vulnerable to another tumble. |
| US tech stocks are once again leading the way, plunging on the back of a combination of individual concerns – Apple iPhone sales for example – and general weaker risk appetite. The FAANG stocks extraordinary performance in the first half of the year has put them front and centre once the market turned and some now find themselves in negative territory for 2018, with others not far behind. | US tech stocks are once again leading the way, plunging on the back of a combination of individual concerns – Apple iPhone sales for example – and general weaker risk appetite. The FAANG stocks extraordinary performance in the first half of the year has put them front and centre once the market turned and some now find themselves in negative territory for 2018, with others not far behind. |
| While many would argue a correction has been on the cards for some time due to the growing list of risks to the outlook, be that rising US interest rates, Trump’s aggressive trade agenda, Brexit, Italy or one of a number of other headwinds, how bad it will get is difficult to say. We’re already near the October lows and in correction territory, even close to bear market in some cases such as the DAX, if this is just a corrective move, I would expect investors to start eyeing up some bargains soon. | While many would argue a correction has been on the cards for some time due to the growing list of risks to the outlook, be that rising US interest rates, Trump’s aggressive trade agenda, Brexit, Italy or one of a number of other headwinds, how bad it will get is difficult to say. We’re already near the October lows and in correction territory, even close to bear market in some cases such as the DAX, if this is just a corrective move, I would expect investors to start eyeing up some bargains soon. |
| Also coming up today | Also coming up today |
| There’s lots in the economic calendar, particularly from America as they clear the decks before Thanksgiving. New home sales and durable goods orders will give a picture of the strength of the US economy. | There’s lots in the economic calendar, particularly from America as they clear the decks before Thanksgiving. New home sales and durable goods orders will give a picture of the strength of the US economy. |
| City traders will scrutinise the latest UK public finance figures to see if the government’s fiscal plans are on track. However, that will be overshadowed by Theresa May’s trip to Brussels to discuss the Brexit deal with Jean-Claude Juncker. | City traders will scrutinise the latest UK public finance figures to see if the government’s fiscal plans are on track. However, that will be overshadowed by Theresa May’s trip to Brussels to discuss the Brexit deal with Jean-Claude Juncker. |
| In the eurozone, the Commission is expected to confirm that Italy’s 2019 budget isn’t acceptable. | In the eurozone, the Commission is expected to confirm that Italy’s 2019 budget isn’t acceptable. |
| That paves the way for the EC to launch an excessive deficit procedure which could lead to Italy being fined (although it’s a long process). | That paves the way for the EC to launch an excessive deficit procedure which could lead to Italy being fined (although it’s a long process). |
| The agenda: | The agenda: |
| 9.30am GMT: UK public finances for October | 9.30am GMT: UK public finances for October |
| 10am GMT: OECD releases its latest economic outlook | 10am GMT: OECD releases its latest economic outlook |
| 1.30pm GMT: US durable goods orders and weekly jobless figures | 1.30pm GMT: US durable goods orders and weekly jobless figures |
| 3pm GMT: US home sales, Michigan sentiment survey | 3pm GMT: US home sales, Michigan sentiment survey |
| 3.30pm GMT: US oil inventory figures | 3.30pm GMT: US oil inventory figures |