Trump’s fresh $300bn China tariff threat spooks markets – business live – The Guardian

Trump’s fresh $300bn China tariff threat spooks markets – business live – The Guardian

trump’s-fresh-$300bn-china-tariff-threat-spooks-markets-–-business-live-–-the-guardian

Of the 10,000 businesses the Bank of England surveys across the country, three quarters are saying “they are ready as they can be” for the EU divorce, while 10% say they are ready for Brexit.

When those businesses are asked what they think will happen in a no deal scenario, Carney said most believe output will fall, jobs will be cut and investment will drop.

The Bank of England boss stresses that is the view of businesses, not the central bank. “We do not have an official forecast of no deal,” he reiterates.

Carney has also highlighted that major industries including the automotive, food and chemicals, and transport sectors have held back investment in light of Brexit uncertainty:


One of the reasons why the economy has slowed is that business investment is very, very weak. And it’s unusually weak at this stage in an economic expansion, it’s unusually weak given that there’s not spare capacity, and that the financial sector is wide open.

And the reason is because of uncertainty.

They could borrow the money and their balance sheets are good…and part of the uncertainty is that many of these businesses know that they could end up making an investment that turns out to be stranded because the trading relationship fundamentally changes.

Bank of England governor signals no-deal Brexit is a big possibility

Bank of England governor Mark Carney is speaking to the BBC’s Today programme following yesterday’s inflation report and the decision to keep interest rates on hold at 0.75%.

He has said that while the UK is “not aiming for a no deal Brexit” there is a “significant possibility that a deal will not be struck” which is why preparations are being made.

Carney said that UK’s major banks and insurance companies are being asked whether they are ready for a worst case scenario like no deal. “We are absolutely confident” that they are prepared, he says.

Updated

More trade news is expected from the White House today.

Trump’s daily itinerary for Friday includes “an announcement on EU trade”, which sounds a bit foreboding after the threats against China overnight.

However, Bloomberg is reporting that the US president is set to unveil a deal to open the EU to more beef exports. It says American farmers will be entitled to around 80% or 35,000 metric tons of an annual EU quota on hormone-free beef over seven years.

European markets open sharply lower

The London stock market has fallen into the red at the start of trading, with the FTSE 100 opening lower by 1.6% or 114 points to 7,463 points.

France’s Cac 40 opened lower by around 2.5% while Spain’s IBEX dropped 1.6%.

Italian markets have also taken a dive. The FTSE MIB is down more than 2.1% or 451 points to 21,111 points

Updated

Introduction: Trump steps up US-China trade war threats

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Global shares tumbled overnight in reacted to Donald Trump’s plans to ramp up the US trade war with Beijing.

In a fresh Twitter missive to his far-east counterparts, the US president said he would slap a 10% tariff on the $300bn worth of remaining Chinese goods not yet impacted by American border taxes, by September:

Donald J. Trump
(@realDonaldTrump)

…buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and…

August 1, 2019

Donald J. Trump
(@realDonaldTrump)

…during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%…

August 1, 2019

Unsurprisingly, Wall Street stocks fell in reaction, sending the Dow Jones down 1% and the S&P 500 down around 0.8% in overnight trading.

Asian shares also took a hit. In Tokyo the Nikkei fell 2.1%, with Hong Kong and Shanghai also taking a spill. The Kospi was down 0.8% in Seoul while in Sydney the benchmark ASX200, which passed its pre-global financial crisis all-time high on Tuesday, fell 0.3%.

European markets aren’t expected to fare much better at the market open.

The agenda

  • 9:30am BST: UK construction PMI
  • 10am BST: Eurozone producer price index (June), Eurozone retail sales (June)
  • 13:30 BST: US non-farm payrolls (July)

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