Bloomberg
“China Plans Tariffs on $60 Billion of Imports to Counter Trump.”
China announced a list of $60 billion worth of U.S. imports it plans to apply tariffs on should the Trump administration follow through with its latest trade threats.
Duties ranging from 5 percent to 25 percent will be levied on 5,207 kinds of American imports if the U.S. delivers its proposed taxes on another $200 billion of Chinese goods, the Ministry of Finance said in a statement on its website late Friday.
Beijing plans to impose an additional 5 percent in tariffs on about 600 kinds of products including planes and computers, another 10 percent on almost 1,000 products including wigs and textiles, an extra 20 percent on more than 1,000 items including some chemicals, cookers and paper, and an additional 25 percent on over 2,400 products such as meat, wheat, wine and LNG, according to the statement.
The retaliation stands to further inflame tensions between the world’s two biggest economies and echoes China’s response to the previous round of tariffs, which took effect last month.
The Trump administration slapped duties on $34 billion of Chinese goods last month, a move that also prompted immediate retaliation from China. Another $16 billion in levies will likely follow in the coming days or weeks. The U.S. tariffs now in place or threatened add up to almost half of the value of goods it imported from China last year. The Chinese side seem to be seeking to match that ratio with the new proposals.
Reuters
“U.S. job growth slows in July, unemployment rate dips.”
U.S. job growth slowed more than expected in July as employment in the transportation and utilities sectors fell, but a drop in the unemployment rate suggested that the labor market was tightening.
Nonfarm payrolls increased by 157,000 jobs last month, the Labor Department said on Friday. The economy created 59,000 more jobs in May and June than previously reported and needs to generate about 120,000 jobs per month to keep up with growth in the working-age population.
The unemployment rate fell one-tenth of a percentage point to 3.9 percent in July, even as more people entered the labor force in a sign of confidence in their job prospects. The low unemployment rate could allow the Federal Reserve to raise interest rates again in September.
The jobless rate had risen in June from an 18-year low of 3.8 percent in May. Economists polled by Reuters had forecast nonfarm payrolls increasing by 190,000 jobs last month and the unemployment rate falling to 3.9 percent.
The slowdown in hiring last month likely is not the result of trade tensions, which have escalated in recent days, but rather because of a shortage of workers. There are about 6.6 million unfilled jobs in the nation. A survey of small businesses published on Thursday showed a record number in July of establishments reporting that they could not find workers.
According to the NFIB, the vacancies were concentrated in construction, manufacturing and wholesale trade industries. Small businesses said they were also struggling to fill positions that did not require skilled labor.
BBC News
“Carney: No-deal Brexit risk ‘uncomfortably high’.”
The possibility of a no-deal Brexit is «uncomfortably high» and «highly undesirable», Bank of England governor Mark Carney has told the BBC. Mr Carney said the prospect of the UK leaving the EU without a deal was «a relatively unlikely possibility, but it is a possibility». He said it was «absolutely in the interest» of the EU and UK to have a transition period. Critics poured scorn on the comments, calling them part of «Project Fear».
Mr Carney’s warning came ahead of Theresa May’s meeting with French President Emmanuel Macron at his summer retreat on a small island off the French Mediterranean coast. The prime minister is cutting short a holiday in Italy as she continues to seek support among European leaders for her Brexit plans.
The Bank governor told the BBC that the financial system was robust and could withstand any post-Brexit shocks. «We have made sure that banks have the capital, the liquidity that they need and we have the contingency plans in place,» he told the BBC’s Today programme. “There is a very broad range of potential outcomes to these Brexit negotiations and we are entering a crucial phase.»
The pound declined on the currency markets in the wake of Mr Carney’s comments, falling below the $1.30 mark, but had recovered by early afternoon.
Bloomberg
“U.S. Trade Deficit Widened in June for First Time in Four Months.”
The U.S. trade deficit grew in June for the first time in four months as imports increased and the value of shipments overseas declined against a backdrop of escalating tensions with America’s trading partners. The gap widened 7.3 percent to $46.3 billion from a revised $43.2 billion in the prior month, Commerce Department data showed Friday.
The June figures capped an otherwise positive quarter for U.S. trade, as a narrowing of the deficit contributed the most to economic growth since 2013. While tariffs and the threat of retaliatory levies prompted a pickup in shipments of soybeans and some other materials, American exports of capital goods, vehicles and consumer goods declined in June, indicating trade may be of less help to the economy going forward.
Overall exports dropped 0.7 percent to $213.8 billion, despite record overseas shipments of petroleum and all industrial supplies and materials. Imports climbed 0.6 percent to $260.2 billion, boosted by pharmaceuticals, crude oil, chemicals and other industrial supplies.
The median estimate of economists surveyed by Bloomberg called for a June trade deficit of $46.5 billion. The trade gap data for July will be more closely watched for signs that developments related to President Donald Trump’s trade policies are taking a toll on the economy.
Rising demand by U.S. households and businesses is expected to keep supporting purchases of foreign-made goods in coming months. At the same time, it is hard to predict how exports may perform, given that the headwinds from trade also are a risk to the outlook for the global economy. In addition, the dollar continues to strengthen.
The U.S. economy accelerated to a 4.1 percent pace of growth in the second quarter, the fastest since 2014. A big boost came from net exports, which contributed 1.06 percentage points to growth, the most since 2013. That reflected a jump in shipments abroad of soybeans, up 40 percent in the first half of the year compared with 2017, and petroleum and related products.