Rolling coverage of the latest economic and financial news, as US president fires new warning shots at Beijing
- Introduction: Trump could impose tariffs on another $267bn of Chinese goods
- Tech product such as iPhones could be hit
- Trump: Could raise existing tariffs from 10% to 25%
- Trump to meet Xi at G20
Just in: UK retail sales have been stronger than expected this month, but shopkeepers are anxious about the future.
That’s according to the latest ‘distributive trades’ survey from the CBI. Here’s the main findings:
UK CBI Retailing Reported Sales Nov: 19 (est 10 ; prev 5)
UK CBI Total Dist. Reported Sales Nov:18 (prev 17)
UK CBI retail survey: ️
• Sales rise more than expected in Nov
• Business expectations joint-weakest since 2012
Look who’s in Beijing today….
The trade war is a major headache for China, as it tries to manage its economic transformation while avoiding a sharp economic slowdown.
With US relations looking ropey, Beijing needs allies in other parts of the world. So it may be significant that China’s president Xi has just landed in Spain for an official visit, ahead of the G20 meeting in Argentina.
Xi will also visit the Senate, the City Hall of Madrid and end his visit with a gala dinner at the Royal Palace hosted by the Spanish royal couple.
A business forum with the executives of major Spanish and Chinese companies is also scheduled to be held to promote investments in both countries.
Trump’s trade war threats have taken the shine of Europe’s stock markets today.
After a strong rally on Monday, the trading floors are more subdued today.
“Interestingly investors didn’t seem troubled by a new warning from US President Donald Trump who said he is likely to go ahead with a hike on tariffs on Chinese goods. The Shanghai composite index was barely changed and Hong Kong’s Hang Seng index only dipped 0.17%.
“The market is perhaps waiting for Mr Trump’s upcoming meeting with Chinese President Xi Jinping to see whether the current talk simply amounts to scare tactics or whether he is serious about targeting additional Chinese goods with tariffs.”
Over in the City, shares in holiday firm Thomas Cook have plunged by a third after another profits warning.
Thomas Cook surprised investors by rushing out its financial results this morning. They show that underlying profits for 2018 would be £30m less than expected at £250m – £30m lower than it was expecting two months ago.
Yesterday afternoon President Trump alluded to possible tariffs on iPhones and other Apple products, which is likely to create fresh demand concerns following recent supply chain rancour.
While we take the negative supply chain comments with the proverbial grain of salt, there’s little question that higher iPhone prices due to potential tariffs would likely negatively impact demand and profitability at some level. We certainly acknowledge the near-term risk, but remain positive on the long-term position and would buy on weakness.
Donald Trump has also managed to weaken the pound, by shoving a spanner into Theresa May’s Brexit plans.
Last night, the US president declared that the agreement on the table looks like a “great deal for the EU” that would stop the UK trading with the US.
“The United States is a tough negotiator.
President Trump’s always said very plainly ‘I put America first’. Well, I’d expect the British prime minister to put British interests first.”
‘He is wrong,’ says David Lidington MP, commenting on President Trump’s claims the PM’s #Brexit deal is bad for the UK.
De facto deputy PM David Lidington is on @LBC now….
On Trump, he says: “I regret the fact he said what he did…”
Somebody had to do it. Poor David Lidington on #r4today batting gamely for May’s deal but having to spend his time fending off Trump’s attack. You could almost feel sorry for him…
The president of Indonesia is growing increasingly pessimistic that China and the US could resolve their trade dispute, when they met at the G20 summit later this week.
“I’m hoping for a miracle during the G20 meeting, that they will come together, but my feeling is they won’t,” he said.
“This is the first time in 29 years of APEC that an APEC meeting produced no communique.”
Beijing have responded to Donald Trump’s comments.
Foreign ministry spokesman Geng Shuang told reporters that presidents Trump and Xi had agreed to reach a ‘mutually beneficial’ arrangement on trade earlier this month.
#TRUMP, XI AGREED TO REACH MUTUALLY BENEFICIAL AGREEMENTS: GENG – BBG
#CHINA‘S GENG REFERS TO NOV. 1 TRUMP-XI PHONE CALL – BBG
Commodity prices have also been hit by Trump’s threat to hike existing tariffs on China, and possibly extend them to all Chinese imports.
Traders are calculating that a full-blooded trade war will hurt demand for metals such as zinc, nickel and aluminium
Shares in UK tech firm Dialog Semiconductor, a key Apple supplier, have dropped 2.2% in early European trading.
Apple shares fell over 2% in after-hours trading, following Trump’s threat to escalate the trade war.
Wall Street is clearly concerned that the dispute with China could escalate in 2019, hurting sales of iPhones.
America’s technology industry has hit out at Trump’s threat to impose steeper tariffs on goods from China, such as iPhones.
“Despite the pain Americans have felt in communities across the United States as a result of tariffs, the president has signalled he wants to continue this short-sighted trade war.
Imposing a new round of tariffs would cause a shock that will reverberate across America and the globe. It would further threaten global supply chains, leading to higher prices for the electronic devices people rely on every day and even the loss of American jobs.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
“If we don’t make a deal, then I’m going to put the $267 billion additional on.”
China has to open up their country to competition from the United States.”
“I can make it [the tariff] 10 per cent, and people could stand that very easily.”