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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/jun/11/trade-war-donald-trump-recession-uk-unemployment-earnings-business-live
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| Trade war could lead to 'Trump recession'; UK jobs report due - business live | Trade war could lead to 'Trump recession'; UK jobs report due - business live |
| (32 minutes later) | |
| Paul Donovan of UBS Wealth Management points out that @realDonaldTrump has been more vocal about the trade war with China recently. | |
| However, Donovan also suspects Trump may resist imposing new tariffs as the re-election race hots up, telling clients: | |
| US President Trump suggested the threat of trade taxes against goods that have spent any time in Mexico may be revisited in ninety days. This is unlikely to affect markets in the near term (the closer we get to the US presidential election, the less credible threats of tax hikes become). It does reinforce the idea of a risk premium for investing in supply chains involving the US. | |
| US President Trump also suggested that there would be more trade taxes if Chinese President Xi failed to meet with Trump at the G20. The Trump Twitter Feed has become more aggressive in suggesting tax increases after the end of June. | |
| Shares in Ted Baker, the UK fashion chain, have slumped by a quarter this morning after it hit investors with another profits warning. | |
| The group slashed its earnings outlook again, warning that trading conditions have deteriorated. | |
| “Ongoing consumer uncertainty in a number of key markets and elevated levels of promotional activity across our global markets have resulted in extremely difficult trading conditions during the financial year to date. | |
| I imagine the ‘forced hugging’ row which prompted founder Ray Kelvin to quit earlier this year won’t have helped the firm either.. | |
| Ted Baker warns on profits amid 'extremely difficult' conditions | |
| Investors don’t seem too worried about the threat of a recession. | Investors don’t seem too worried about the threat of a recession. |
| European markets have opened higher, on the back of strong gains in Asia overnight. This has sent Britain’s Footsie index to a new five-week high, clawing back May’s losses. | European markets have opened higher, on the back of strong gains in Asia overnight. This has sent Britain’s Footsie index to a new five-week high, clawing back May’s losses. |
| FTSE 100: up 31 points or 0.4% to 7,406 | FTSE 100: up 31 points or 0.4% to 7,406 |
| German DAX: up 123 points or 1% at 12,168 | German DAX: up 123 points or 1% at 12,168 |
| French CAC: up 17 points or 0.3% at 5,400 | French CAC: up 17 points or 0.3% at 5,400 |
| Connor Campbell of SpreadEx says: | Connor Campbell of SpreadEx says: |
| Closing their ears to more Trump trade chatter, the markets continued their June jump, if with slightly less spring in their step. | Closing their ears to more Trump trade chatter, the markets continued their June jump, if with slightly less spring in their step. |
| China’s Shanghai market also had a good day; the CSI300 index has jumped 3%, or over 108 points, to 3,719 points. Australia’s S&P/ASX 200 index has gained 1.6%. | China’s Shanghai market also had a good day; the CSI300 index has jumped 3%, or over 108 points, to 3,719 points. Australia’s S&P/ASX 200 index has gained 1.6%. |
| Why aren’t investors panicking about the prospect of a deeper US-China trade war? One theory is that they suspect a deal will be struck at the G20 summit -- and that Trump’s threat of fresh tariffs if Xi doesn’t play ball will let him declare victory once the agreement’s been signed. | Why aren’t investors panicking about the prospect of a deeper US-China trade war? One theory is that they suspect a deal will be struck at the G20 summit -- and that Trump’s threat of fresh tariffs if Xi doesn’t play ball will let him declare victory once the agreement’s been signed. |
| Negotiation tactics? President trump threatens to raise tariffs on Chinese imports again if president Xi Jinping does not meet with him at G20 summit at month end | Negotiation tactics? President trump threatens to raise tariffs on Chinese imports again if president Xi Jinping does not meet with him at G20 summit at month end |
| Donald Trump taste for trade conflict could even extend to French wine. | Donald Trump taste for trade conflict could even extend to French wine. |
| The president has claimed that America’s wine industry is being treated unfairly, because French wine incurs a low tariff when imported into the US. | The president has claimed that America’s wine industry is being treated unfairly, because French wine incurs a low tariff when imported into the US. |
| The Hill has the details: | The Hill has the details: |
| “You know, France charges us a lot for the wine and yet we charge them little for French wine,” Trump said. | “You know, France charges us a lot for the wine and yet we charge them little for French wine,” Trump said. |
| The president claimed that winemakers in California complained to him that French wine can be imported at little cost, but that they have to pay high duties to export their products into France. | The president claimed that winemakers in California complained to him that French wine can be imported at little cost, but that they have to pay high duties to export their products into France. |
| “And you know what, it’s not fair,” Trump said. “We’ll do something about it.” | “And you know what, it’s not fair,” Trump said. “We’ll do something about it.” |
| Wine tariffs are set across the EU, so any clampdown on claret, champagne, and côtes du Rhône would also affect gewurztraminer, riesling, rioja etc from other member states. | Wine tariffs are set across the EU, so any clampdown on claret, champagne, and côtes du Rhône would also affect gewurztraminer, riesling, rioja etc from other member states. |
| According to America’s Wine Institute, EU tariffs range from 11 cents to 29 cents per bottle, while the US charges just 5 cents for a standard 750ml bottle from Europe, or 14 cents for fizz. | According to America’s Wine Institute, EU tariffs range from 11 cents to 29 cents per bottle, while the US charges just 5 cents for a standard 750ml bottle from Europe, or 14 cents for fizz. |
| Trump, of course, is a teetotal, so wouldn’t suffer from a wine war. | |
| Donald Trump’s threat to impose tariffs on all Chinese goods is worrying US businesses. | Donald Trump’s threat to impose tariffs on all Chinese goods is worrying US businesses. |
| Gary Shapiro from the Consumer Technology Association fears they could drive the US economy into a “Trump recession”. | Gary Shapiro from the Consumer Technology Association fears they could drive the US economy into a “Trump recession”. |
| He told CNBC that tariffs aren’t working as well as the president claims: | He told CNBC that tariffs aren’t working as well as the president claims: |
| “They are taxes, they hurt consumers, they hurt American companies.” | “They are taxes, they hurt consumers, they hurt American companies.” |
| More China tariffs could push the US into a 'Trump recession,' CEO says https://t.co/YBEWU5UHHN | More China tariffs could push the US into a 'Trump recession,' CEO says https://t.co/YBEWU5UHHN |
| Last month, America hiked the tariff on thousands of Chinese products from 10% to 25%. It’s due to kick in next weekend, making food, machinery, consumer goods, and chemicals more expensive to import. | Last month, America hiked the tariff on thousands of Chinese products from 10% to 25%. It’s due to kick in next weekend, making food, machinery, consumer goods, and chemicals more expensive to import. |
| That still leaves around half China’s sales to the US, worth around $300bn, in the firing line for Trump tariffs. | That still leaves around half China’s sales to the US, worth around $300bn, in the firing line for Trump tariffs. |
| Many economists fear that the US economy has slowed in recent months, partly due to trade conflicts. | Many economists fear that the US economy has slowed in recent months, partly due to trade conflicts. |
| Last Friday’s weak jobs report, showing American firms only hired 75,000 new staff last week, has added to these worries. | Last Friday’s weak jobs report, showing American firms only hired 75,000 new staff last week, has added to these worries. |
| The U.S. added 75,000 workers to nonfarm payrolls in May for a total of 151.1 million jobs. Results for prior two months were revised lower by a net of 75,000 https://t.co/6H24rv4E6Y pic.twitter.com/cYP5cfsIcn | The U.S. added 75,000 workers to nonfarm payrolls in May for a total of 151.1 million jobs. Results for prior two months were revised lower by a net of 75,000 https://t.co/6H24rv4E6Y pic.twitter.com/cYP5cfsIcn |
| 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. |
| Donald Trump once boasted of being a ‘Tariff Man’, and sometimes it feels like the US president enjoys talking about little else. | Donald Trump once boasted of being a ‘Tariff Man’, and sometimes it feels like the US president enjoys talking about little else. |
| Just days after lifting the threat of a trade war with Mexico, Trump has floated the prospect of a deeper conflict with China. | Just days after lifting the threat of a trade war with Mexico, Trump has floated the prospect of a deeper conflict with China. |
| In a piece of tub-thumping drama, the president declared overnight that he’d impose new tariffs on Chinese exports “immediately” if its leader, Xi Jinping, doesn’t meet him at the G20 summit later this month. | In a piece of tub-thumping drama, the president declared overnight that he’d impose new tariffs on Chinese exports “immediately” if its leader, Xi Jinping, doesn’t meet him at the G20 summit later this month. |
| He told reporters that America could impose tariffs of 25%, or even higher, on the $300bn of Chinese goods that haven’t yet been caught up in the trade war. Such a move would be a major escalation in a conflict that has already dented trade and weighed on global growth. | He told reporters that America could impose tariffs of 25%, or even higher, on the $300bn of Chinese goods that haven’t yet been caught up in the trade war. Such a move would be a major escalation in a conflict that has already dented trade and weighed on global growth. |
| But Trump isn’t backing down, telling CNBC that his trade war policy is getting results. | But Trump isn’t backing down, telling CNBC that his trade war policy is getting results. |
| “The China deal is going to work out. You know why? Because of tariffs. | “The China deal is going to work out. You know why? Because of tariffs. |
| Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don’t want to pay the tariffs.” | Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don’t want to pay the tariffs.” |
| [Fact check: American importers, not Chinese exporters, pay these tariffs.....] | [Fact check: American importers, not Chinese exporters, pay these tariffs.....] |
| pic.twitter.com/TwLPmiAB78 | pic.twitter.com/TwLPmiAB78 |
| Trump’s comments put Beijing in rather a fix. | Trump’s comments put Beijing in rather a fix. |
| President Xi Jinping can hardly be seen kowtowing to the White House, so may resist committing to a meeting at the G20. But without formal talks at the G20, how will the trade war be resolved? This may take some diplomatic skills. | President Xi Jinping can hardly be seen kowtowing to the White House, so may resist committing to a meeting at the G20. But without formal talks at the G20, how will the trade war be resolved? This may take some diplomatic skills. |
| President Trump saying he would expand the tariffs list against China (an estimated $300 billion more) if President Xi doesn't show up at the G20 meeting can be taken as a 'show up or else' diplomatic demand. China has not historically responded well to such ultimatums | President Trump saying he would expand the tariffs list against China (an estimated $300 billion more) if President Xi doesn't show up at the G20 meeting can be taken as a 'show up or else' diplomatic demand. China has not historically responded well to such ultimatums |
| Also coming up today | Also coming up today |
| New UK unemployment data is due this morning, which may show that the long run of rising employment levels has faded. | New UK unemployment data is due this morning, which may show that the long run of rising employment levels has faded. |
| Economists also predict that earnings growth slowed - basic pay, excluding bonuses, may have risen by 3.1% in the year to April, down from 3.3% a month ago. | Economists also predict that earnings growth slowed - basic pay, excluding bonuses, may have risen by 3.1% in the year to April, down from 3.3% a month ago. |
| This would be another sign that the British economy is stumbling in the face of economic uncertainty at home and abroad; just yesterday, we learned that the UK economy shrank by an alarming 0.4% in April. | This would be another sign that the British economy is stumbling in the face of economic uncertainty at home and abroad; just yesterday, we learned that the UK economy shrank by an alarming 0.4% in April. |
| UK economy shrinks after Brexit car factory shutdowns | UK economy shrinks after Brexit car factory shutdowns |
| Michael Hewson of CMC Markets sets the scene: | Michael Hewson of CMC Markets sets the scene: |
| Having seen manufacturing activity fall sharply in April there is a concern that wage growth could start to go the same way as the economy slows. | Having seen manufacturing activity fall sharply in April there is a concern that wage growth could start to go the same way as the economy slows. |
| Having come in at 3.3% for the last three months there is a sense we could start to slip back, with expectations of a softening to 3.1%, for the three months to April. The unemployment rate is expected to remain unchanged at 3.8%. | Having come in at 3.3% for the last three months there is a sense we could start to slip back, with expectations of a softening to 3.1%, for the three months to April. The unemployment rate is expected to remain unchanged at 3.8%. |
| Two of the Bank of England’s top policymakers - deputy governor Ben Broadbent and MPC member Michael Saunders - may give their view on the UK economy today. They’re appearing at parliament for re-appointment hearings to the BoE. | Two of the Bank of England’s top policymakers - deputy governor Ben Broadbent and MPC member Michael Saunders - may give their view on the UK economy today. They’re appearing at parliament for re-appointment hearings to the BoE. |
| The agenda | The agenda |
| 9.30am BST: UK unemployment and earnings report | 9.30am BST: UK unemployment and earnings report |
| 10am BST: Eurozone sentix investor confidence survey | 10am BST: Eurozone sentix investor confidence survey |
| 10am BST: BoE policymakers Michael Saunders and Ben Broadbent at the Treasury Committee in parliament | 10am BST: BoE policymakers Michael Saunders and Ben Broadbent at the Treasury Committee in parliament |