Bloomberg
“Trump’s Tariff Barrage Pushes China Fight to Point of No Return.”
U.S. President Donald Trump is pushing his trade conflict with China toward a point where neither side can back down.
By Aug. 30, as the U.S. nears mid-term elections vital for Trump’s legislative agenda, the White House will be ready to impose 10 percent tariffs on $200 billion of Chinese-made products, ranging from clothing to television parts to refrigerators. The levies announced Tuesday — together with some $50 billion already in the works — stand to raise import prices on almost half of everything the U.S. buys from the Asian nation.
China has seven weeks to make a deal or dig in and try to outlast the U.S. leader. President Xi Jinping, facing his own political pressures to look tough, has vowed to respond blow-for-blow. He’s already imposed retaliatory duties targeting Trump’s base including Iowa soybeans and Kentucky bourbon.
Yet matching the latest U.S. barrage would force China to either levy much higher tariffs or take more disruptive steps like canceling purchase orders, encouraging consumer boycotts and putting up regulatory hurdles. Not only does that risk provoking Trump to follow through on threats to tax virtually all Chinese products, it could unleash nationalist sentiment on both sides that fuels a deeper struggle for geopolitical dominance.
Stocks fell and commodities slid with emerging-market assets Wednesday as investors assessed the fallout. Futures on the S&P 500 were down 0.6 percent as of 8:55 a.m. in New York and the Stoxx Europe 600 Index retreated 1 percent. While earlier tariffs were expected to have only a limited impact, economists warn a full-blown trade war could derail the strongest economic upswing in years.
The Chinese Commerce Ministry said Tuesday that it would be forced to retaliate against what it called “totally unacceptable” U.S. tariffs. There have been no confirmed high-level talks between the two sides since an early June visit to Beijing by U.S. Commerce Secretary Wilbur Ross that achieved no breakthroughs.
Reuters
“Merkel recalls own East German youth in riposte to Trump.”
Chancellor Angela Merkel recalled her own youth in Soviet-dominated East Germany and said Germany was independent in its policy choices in a pointed response to U.S. President Donald Trump saying Berlin was a “totally controlled by Russia”.
Three hours after Trump’s startling tirade over German imports of Russian gas and its slowness to increase defense spending, Merkel told reporters on arrival at a NATO summit in Brussels on Wednesday: “I have experienced myself how a part of Germany was controlled by the Soviet Union.
“I am very happy that today we are united in freedom, the Federal Republic of Germany. Because of that we can say that we can make our independent policies and make independent decisions. That is very good, especially for people in eastern Germany.”
She also defended Germany’s contribution to an alliance which Trump says has placed too much burden on the U.S. taxpayer: “Germany does a lot for NATO,” she said.
“Germany is the second largest provider of troops, the largest part of our military capacity is offered to NATO and until today we have a strong engagement toward Afghanistan. In that we also defend the interests of the United States.”
BBC News
“Uber executive resigns after race discrimination probe.”
A senior executive at the ride-hailing firm Uber has resigned, following an investigation into how she handled allegations of racial discrimination at the firm.
Liane Hornsey was head of Uber’s human resources department, with the title of chief people officer.
She had been in the role for 18 months.
Her departure comes just a year after the firm’s founder, Travis Kalanick, left under a cloud following reports of gender discrimination and harassment.
Since then, new chief executive Dara Khosrowshahi has focused on turning around the company’s reputation and overhauling what some said had become a toxic corporate culture.
The departure of Ms Hornsey, who previously worked for Google, represents another setback for the firm.
Uber has also had to wrestle with licensing problems in major cities, including London, and has had to call a temporary halt to its driverless car programme following a fatality..
Bloomberg
“Bank of Canada Raises Rates, Keeps Hiking Path Amid Trade Rows.”
Bank of Canada Governor Stephen Poloz brushed aside concerns about trade wars and pressed ahead with a fresh interest rate increase as inflation hovers at its highest in seven years.
The Ottawa-based central bank raised its overnight benchmark rate by a quarter point to 1.5 percent on Wednesday, the second hike this year and fourth over the past 12 months. The statement didn’t introduce any new “dovish” language, with officials only reiterating that rates will need to rise further, albeit gradually, to keep price pressures in check.
“Governing Council expects that higher interest rates will be warranted to keep inflation near target and will continue to take a gradual approach, guided by incoming data,” the bank said.
The rate move signals policy makers are determined to bring rates back to normal levels, and are confident in the Canadian economy’s ability to cope with both higher borrowing costs and the mounting trade tensions.
In its statement and accompanying monetary policy report, the central bank described an economy running close to capacity where higher oil prices, a weaker Canadian dollar and stronger-than- expected business investment is fully offsetting the negative effect of trade uncertainty. Exporters, meanwhile, are doing even better than previously estimated because of buoyant foreign demand.
The Bank of Canada forecast growth will average 2 percent over the next three years, unchanged from its last estimate in April and still slightly higher than what officials believe is the economy’s long-term sustainable pace. The latest growth forecasts incorporate negative adjustments that capture greater trade uncertainty.
The central bank also raised its estimates for inflation, but expressed confidence it would settle back to 2 percent after temporary factors drove the rate above target.
In another positive development, officials highlighted that the composition of growth is shifting away from consumption to exports and business investment — implying they believe the expansion is more sustainable..