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Christine Lagarde says world must avoid the ‘self-inflicted wounds’ of a tit-for-tat wrangle
The International Monetary Fund has called for a speedy end to the deepening trade war between the United States and China after calculating that the tit-for-tat tariffs will cost $455bn (£357.5bn) in lost output next year – more than the size of South Africa’s economy.
Christine Lagarde, the IMF’s managing director, underlined her organisation’s growing concern at the most serious outbreak of trade tension since the 1930s and said “self-inflicted wounds” had to be avoided.
Brexit and trade disputes push bank’s policy uncertainty index to record high, says report
Donald Trump’s trade wars with China, Mexico and Europe have sent global investment tumbling, according to a World Bank report that forecasts worldwide growth this year will slip back to levels not seen since 2016.
The Washington-based lender to developing world countries said in its half-yearly global health check that spiralling political uncertainty was to blame for a slowdown in trade and a collapse in investment spending that will push down GDP growth to 2.6% this year “before inching up to 2.7% in 2020”.
He also fears that British manufacturing could continue to shrink in the comping months.
The trend in output weakened and, based on its relationship with official ONS data, is pointing to a renewed downturn of production.
“New order inflows declined from both domestic and overseas markets, as already high stock levels at manufacturers and their clients led to difficulties in sustaining output levels and getting agreement on new contracts.
Newsflash: Britain’s factory sector has suffered its worst contraction since the EU referendum almost three years ago.
Data firm Markit reports that new orders and employment both declined last month, hit by Brexit uncertainty and the knock-on impact of the US-China trade war.
New order inflows deteriorated from both domestic and overseas sources. New export business fell for the second month running and at the quickest pace in over four-and-a- half years. Manufacturers reported lower demand from Asia and Europe.
There was also mention of Brexit uncertainty, including clients diverting supply chains away from the UK, leading to lower demand from within the EU.
Democrats are turning a president enraged at the blocking of his border wall into an unhinged beast
Donald Trump’s threats of higher import tariffs against Mexican goods can be better understood not as an escalation of his trade war with the rest of the world, but as the act of a desperate man, prepared to upset most US business leaders to achieve his aim of building a border wall with the country’s southern neighbour.
His anger, which he will bring with him on a state visit to London on Monday, is not so much with Andrés Manuel López Obrador’s administration in Mexico City as with Congress, which has blocked the border wall, or at least restricted funding to such an extent that its completion is unlikely before the next presidential race gets under way.
After 5% tariff announced, president tweets ‘Mexico has taken advantage of the US for decades’
Donald Trump has defended his decision to impose new tariffs on Mexico as stock markets worldwide were rattled by fears of an escalation in trade tensions.
“Mexico has taken advantage of the United States for decades,” Trump tweeted. “Because of the Dems, our Immigration Laws are BAD. Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!”
Senior official says China is ‘not afraid’ of a trade war as Beijing signals potential restrictions on rare-earth exports
Provoking trade disputes is “naked economic terrorism“, a senior Chinese diplomat said on Thursday, ramping up the rhetoric against the US amid a bitter trade war that shows no signs of ending soon.
Zhang Hanhui, China’s vice foreign minister told reporters in Beijing China opposed the use of “big sticks” such as trade sanctions, tariffs and protectionism.
Dow Jones slumps after Beijing signals readiness to restrict exports of rare-earth elements
Financial markets around the world have sold off sharply after Beijing signalled a readiness to strike back at Washington in their escalating trade war by restricting exports of rare-earth elements.
Wall Street recorded steep losses on Wednesday as the Dow Jones slumped to the lowest level in almost four months, losing about 200 points to trade at 25,149. The S&P 500 index also fell to a two-month low, sliding by 18 points to 2,784.
Visit will stress ties between the two countries as tensions over exports rise amid the US-China trade war
Donald Trump and his wife, Melania, landed in Japan on Saturday for a largely ceremonial visit meant to showcase strong ties with Tokyo even as trade tensions loom.
The Japanese prime minister, Shinzo Abe, will treat Trump to an imperial banquet and front-row seats at a sumo tournament during the trip, which lasts until Tuesday.
Shares fall sharply in Asia, Europe and North America in intensifying war of words
The deepening trade and technology war between the US and China has sent global stock markets sharply lower and prompted a warning from the IMF of the increasing risks to the global economy.
Shares fell sharply in Asia, Europe and North America on a day that saw investors alarmed by the intensifying war of words between Washington and Beijing, poor news on the American economy, and political chaos in Britain.
Government will continue to supply aircraft to be used in war, says Jeremy Hunt
The UK government has negotiated a loophole in a German arms export ban to Saudi Arabia that will ensure UK-supplied planes will continue to be used in the war in Yemen, the foreign secretary, Jeremy Hunt, has confirmed.
The news is contained in two unpublished letters from cabinet ministers to the parliamentary Committee on Arms Export Controls (CEAC). The aircraft, Tornado fighter bombers and Eurofighter Typhoons, are used in the Saudi bombing raids designed to push back the Houthi rebellion in the four-year civil war in Yemen. The aircraft were developed by consortiums of European companies and Germany supplies spares for them.
Intensification of tariff dispute also likely to knock almost $600bn off world economy
Donald Trump has been warned by the west’s most influential economics thinktank that further escalation of the US-China trade war would unleash significant damage for the American economy, as well as the rest of the world.
The Paris-based Organisation for Economic Co-operation and Development (OECD) said that an intensification of the dispute between Washington and Beijing would likely knock as much as 0.7% off the level of global GDP by 2021-22.
The struggle over Huawei isn’t really about technology. It is about whether China or the US is to be master
Trade wars, like real ones, are very much easier to start than to stop. The decision by Google to withhold its software from future Huawei smartphones, even if it will continue to support those presently on the market, comes after considerable pressure from the US government. Even so, it is a move that all parties will regret.
The pain for Huawei is obvious. Although it has been stockpiling chips and, presumably, preparing other defences, there is nothing it can sell to consumers outside China that does not depend on American software, and little that does not depend on American chips. As much as half of its global market could disappear, and that is without counting the 5G networking equipment which was the proximate cause of this quarrel. The ultimate cause, of course, is the American fear of losing its position of global pre-eminence, and the Chinese determination to realise that fear.
Steel and aluminium imports from Mexico and Canada affected
Trump pauses implementation of auto tariffs on EU and Japan
The Trump administration moved to cool the simmering trade war with its major trading partners on Friday, ending tariffs on metal imports from Canada and Mexico and announcing a pause on planned tariffs on cars and car parts.
“I’m pleased to announce we’ve just reached agreement with Canada and Mexico,” Donald Trump said. “We’ll be selling our product into those countries without the imposition of tariffs.”
Trump’s hardline stance against China puts Republicans in an awkward position, while Democrats are split
Donald Trump has again defended tariffs as his dogged, often self-contradictory pursuit of a trade war with China put allies and opponents alike in a difficult spot.
Following his instincts, the president has slapped tariffs on $200bn of Chinese imports but the consequences are unpredictable
Donald Trump’s obsession with tariffs may be based on one of his few core beliefs. Or it may be part of a grand strategy to win votes. Either way, triggering a trade war between the world’s two biggest economies represents a huge gamble ahead of next year’s US presidential election.
The US has raised tariffs on $200bn in imports from China to 25% from 10%, with another round in the offing. Beijing vowed to retaliate but Trump, ever the salesman, claimed on Twitter that the new tariffs will bring “FAR MORE wealth” to America.
The president’s bullish advisers may be taking a hard line, but the chances of a deal are better than they look
During Donald Trump’s campaign to be president, he regularly cited China’s export subsidies as “evil”, and in his manifesto he pledged to “cut a better deal with China that helps American businesses and workers compete”.
The president turned decades of musings into a policy mission after his son-in-law, Jared Kushner, handed him a book by the academics Peter Navarro and Greg Autry – Death by China – which set out to explain how China manipulated the global trade system for its own ends.
Britain’s construction sector grew by 1% in the last quarter, as building firms got busier.
But Clive Docwra, managing director of construction consulting and design agency McBains, says Brexit is still hurting the sector.
“Today’s figures mark another increase in output, coming after last month’s statistics showed unexpected moderate growth during February.
“However, this was driven by repair and maintenance - there was no growth in new work across the first quarter of the year, including a decrease in private commercial and housing work.
Britain’s politicians are predictably split on whether the UK is romping along healthily, or simply scrambling to protect itself from Brexit.
The Chancellor of the Exchequer, Philip Hammond, takes an upbeat view on today’s growth figures, pointing out that we’ve now enjoyed nine years of growth.
“Today’s figures show the economy remains robust, with growth of 0.5% in Q1 benefitting every major sector.
“The economy has grown for nine consecutive years, debt is falling, employment is at a record high and wages are rising at their fastest pace in over a decade.
“It’s not surprising to see households and businesses protecting themselves against a potentially disastrous Tory No Deal Brexit.
“With this government increasingly resembling a business entering administration it’s time they admitted the failure of their approach and stood aside for a General Election.
Donald Trump has insisted that there is “no rush” to secure a deal with China despite growing business and Wall Street fears that the ratcheting up of US tariffs risks a full-blown trade war between the world’s two economic superpowers.
US shares, which were falling for much of the day, staged a late rally on Friday night after Trump tweeted that trade talks “will continue” after the hiking of tariffs on $200bn of Chinese goods.