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Trump and Juncker set for tough talks on trade – business live Trump and Juncker set for tough talks on trade – business live
(35 minutes later)
Britain’s stock market has slipped into the red this morning, as investors await the Trump-Juncker meeting in Washington DC.
The blue-chip FTSE 100 has dropped by over 40 points, or 0.55%, wiping out much of yesterday’s rally.
Mining stocks are among the top fallers, reflecting worries that global growth (and demand for commodities) will suffer from a trade war.
Trade concerns are still prevalent in the markets, says Mike van Dulken of Accendo Markets, adding:
In focus today will be the Trump/Juncker US-EU meeting in Washington, an attempt to resolve the recent trade confrontation. Trump is looking for concessions on EU exports to the US (especially cars). Juncker wants a full suspension of US tariffs before any deal can be agreed.
Trade commissioner Cecilia Malmstrom has tweeted that she had “good discussions” with various US politicians.
She met with Republican house senator Paul Ryan, and Democratic leader Nancy Pelosi, yesterday to press Europe’s case, ahead of today’s crunch meeting with the president.
Good discussions in DC yesterday with @SpeakerRyan, @NancyPelosi, @OrrinHatch, @RonWyden, @JohnCornyn, @RepKevinBrady & @davereichert. Meeting @USTradeRep and @SenBobCorker today, before accompanying President @JunckerEU to the meeting with President @realDonaldTrump. pic.twitter.com/TPUq5Z8bFW
Former officials expect today’s White House meeting between Trump and Juncker to be tense, says Politico.
“The negotiating view of Donald Trump is unconditional surrender of the other side,” said Ivo Daalder, who served as the U.S. ambassador to NATO during the Obama administration.
“If you’re a betting person, it’s not going to be a great meeting.”
Paul Donovan of investment bank UBS has a game to play at home: try completing the phrase “Tariffs are the greatest...Paul Donovan of investment bank UBS has a game to play at home: try completing the phrase “Tariffs are the greatest...
He explains:He explains:
Yesterday US President Trump tweeted “Tariffs are the greatest”. The president may have been muddled, forgetting to finish the sentence.Yesterday US President Trump tweeted “Tariffs are the greatest”. The president may have been muddled, forgetting to finish the sentence.
If implemented, tariffs are the greatest tax increase US consumers face this year. Tariffs are the greatest risk to US employment growth. Tariffs are the greatest threat to US and global economic growth.If implemented, tariffs are the greatest tax increase US consumers face this year. Tariffs are the greatest risk to US employment growth. Tariffs are the greatest threat to US and global economic growth.
Trade war fears are already hurting German companies, according to a new survey just released.Trade war fears are already hurting German companies, according to a new survey just released.
The IFO think tank reports that optimism among bosses fell this month, pulling down its ‘expectations index’ to 98.2 this month, from 98.6 in June. That suggests Donald Trump’s trade policies are damaging Europe’s largest economy.The IFO think tank reports that optimism among bosses fell this month, pulling down its ‘expectations index’ to 98.2 this month, from 98.6 in June. That suggests Donald Trump’s trade policies are damaging Europe’s largest economy.
Ifo chief Clemens Fuest said.Ifo chief Clemens Fuest said.
“Companies were slightly more satisfied with their current business situation, but scaled back their business expectations slightly.“Companies were slightly more satisfied with their current business situation, but scaled back their business expectations slightly.
The German economy continues to expand, but at a slower pace.”The German economy continues to expand, but at a slower pace.”
Expectations of car exports have fallen ‘significantly’, IFO adds.Expectations of car exports have fallen ‘significantly’, IFO adds.
This pulled IFO’s business climate index down to 101.7, from 101.8. However its current economic assessment rose to 105.3, from June’s 105.1.This pulled IFO’s business climate index down to 101.7, from 101.8. However its current economic assessment rose to 105.3, from June’s 105.1.
🇩🇪#IFO: somewhat disappointing compared to the strong (manu) #PMI number in Germany yesterday. But overall, its still a solid report.The exp. fell yet again, now 8 month in a row. The exp. are worrying when reflecting on the soft landing in euro area in general and trade war. pic.twitter.com/DoHeWf1heN🇩🇪#IFO: somewhat disappointing compared to the strong (manu) #PMI number in Germany yesterday. But overall, its still a solid report.The exp. fell yet again, now 8 month in a row. The exp. are worrying when reflecting on the soft landing in euro area in general and trade war. pic.twitter.com/DoHeWf1heN
German broadcaster ZDF reckons there are three ways the Trump-Juncker talks can play out.German broadcaster ZDF reckons there are three ways the Trump-Juncker talks can play out.
Scenario 1: The EU proposes renegotiating all tariffs with the EU, alongside reform of the World Trade Organisation. In return, president Trump would drop his threat to tax EU cars. That would lead to lengthy negotiations, and isn’t the radical solution Trump would favour.Scenario 1: The EU proposes renegotiating all tariffs with the EU, alongside reform of the World Trade Organisation. In return, president Trump would drop his threat to tax EU cars. That would lead to lengthy negotiations, and isn’t the radical solution Trump would favour.
Scenario 2: Juncker proposes a new plurilateral deal just on car sales, which would lower or even abolish all auto tariffs. However it would probably have to include other countries, such as Korea and Japan - complicating the chances of a quick deal.Scenario 2: Juncker proposes a new plurilateral deal just on car sales, which would lower or even abolish all auto tariffs. However it would probably have to include other countries, such as Korea and Japan - complicating the chances of a quick deal.
Scenario 3: No deal is reached, so Trump presses on with tariffs on EU car sales, and the EU retaliates. That would take the global economy closer to a full-blown trade war.Scenario 3: No deal is reached, so Trump presses on with tariffs on EU car sales, and the EU retaliates. That would take the global economy closer to a full-blown trade war.
We shouldn’t expect a big breakthrough on trade today, says Simon French of City firm Panmure Gordon.We shouldn’t expect a big breakthrough on trade today, says Simon French of City firm Panmure Gordon.
He writes:He writes:
Today represents an important test case for the breadth and sustainability of trade frictions as European Commissioner Jean-Claude Juncker meets with US president Trump.Today represents an important test case for the breadth and sustainability of trade frictions as European Commissioner Jean-Claude Juncker meets with US president Trump.
We do not expect a positive read-out and retain our base case that trade frictions will continue to expand all the way to the US mid-term elections in November.We do not expect a positive read-out and retain our base case that trade frictions will continue to expand all the way to the US mid-term elections in November.
Newsflash: Europe is preparing to impose tariffs on $20bn of US imports, EU trade commissioner Cecilia Malmstrom has revealed.Newsflash: Europe is preparing to impose tariffs on $20bn of US imports, EU trade commissioner Cecilia Malmstrom has revealed.
These tariffs would be brought in if Donald Trump follows through on his threat to hit European car imports with new tariffs, says Malmstrom, as she raises the heat ahead of today’s meeting.These tariffs would be brought in if Donald Trump follows through on his threat to hit European car imports with new tariffs, says Malmstrom, as she raises the heat ahead of today’s meeting.
Malmstrom told Swedish daily Dagens Nyheteron (via Reuters).Malmstrom told Swedish daily Dagens Nyheteron (via Reuters).
“We hope that it doesn’t come to that and that we can a solution. If not, the EU Commission is preparing a rather long list of many of American goods.“We hope that it doesn’t come to that and that we can a solution. If not, the EU Commission is preparing a rather long list of many of American goods.
It would be around $20 billion.”It would be around $20 billion.”
It’s not a very diplomatic approach to today’s White House meeting. But perhaps it’s a good way of getting Trump’s attention...It’s not a very diplomatic approach to today’s White House meeting. But perhaps it’s a good way of getting Trump’s attention...
Maybe Malmstrom has been reading Trump’s Art Of The Deal, which recommended taking a tough attitude in negotiations:Maybe Malmstrom has been reading Trump’s Art Of The Deal, which recommended taking a tough attitude in negotiations:
The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead.”The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead.”
Has the Commissioner been studying @realDonaldTrump #theartofthedeal? Begin a negotiation by announcing a massive threat.....Has the Commissioner been studying @realDonaldTrump #theartofthedeal? Begin a negotiation by announcing a massive threat.....
Shawn Donnan, the FT’s world trade editor, isn’t convinced by Trump’s suggestion of abolishing all US-EU tariffs.Shawn Donnan, the FT’s world trade editor, isn’t convinced by Trump’s suggestion of abolishing all US-EU tariffs.
He points out that some American farmers might be unhappy about a surge of imports from overseas, especially as China is now imposing new tariffs on US goods.He points out that some American farmers might be unhappy about a surge of imports from overseas, especially as China is now imposing new tariffs on US goods.
Trump sets the bar high for a trans-Atlantic trade deal... But would US business go for end to all trade barriers? Sugar? Dairy? https://t.co/qOgaiwxOn6Trump sets the bar high for a trans-Atlantic trade deal... But would US business go for end to all trade barriers? Sugar? Dairy? https://t.co/qOgaiwxOn6
Dutch MEP Marietje Schaake agrees that the idea is a stretch...Dutch MEP Marietje Schaake agrees that the idea is a stretch...
Is he setting the bar high or setting the European delegation up for something he knows is not on the table? Especially as long as steel and aluminum tariffs based on national security & threats on cars, are? https://t.co/c2SswG850uIs he setting the bar high or setting the European delegation up for something he knows is not on the table? Especially as long as steel and aluminum tariffs based on national security & threats on cars, are? https://t.co/c2SswG850u
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
They may need to lay out sponges and towels at the White House today, as Donald Trump hosts European Commission president Jean-Claude Juncker for trade talks.They may need to lay out sponges and towels at the White House today, as Donald Trump hosts European Commission president Jean-Claude Juncker for trade talks.
It could be a bruising meeting. Juncker and trade commissioner Cecilia Malmström hope to dial down the rising tensions in the global economy, and ward off the threat of a full-blown trade war.It could be a bruising meeting. Juncker and trade commissioner Cecilia Malmström hope to dial down the rising tensions in the global economy, and ward off the threat of a full-blown trade war.
The talks will centre on the car industry, with Trump threatening to impose tariffs on $50bn of EU car imports. That would hurt the German auto industry hard, and prompt retaliatory action from Brussels.The talks will centre on the car industry, with Trump threatening to impose tariffs on $50bn of EU car imports. That would hurt the German auto industry hard, and prompt retaliatory action from Brussels.
Juncker could propose some concessions; there is talk that a “plurilateral car deal” could lower tariffs could address Trump’s concerns. However, that would be politically tricky, for both sides -- America currently has a 25% levy on European trucks coming into the country, to protect jobs in its rust belt.Juncker could propose some concessions; there is talk that a “plurilateral car deal” could lower tariffs could address Trump’s concerns. However, that would be politically tricky, for both sides -- America currently has a 25% levy on European trucks coming into the country, to protect jobs in its rust belt.
Juncker has said his goal is to “explain and find out how to prevent a trade war”.Juncker has said his goal is to “explain and find out how to prevent a trade war”.
But the signs aren’t great. Earlier this week, Trump tweeted that tariffs are “great”, and claimed America is being treated as a “piggy bank” by countries who run a trade surplus with it.But the signs aren’t great. Earlier this week, Trump tweeted that tariffs are “great”, and claimed America is being treated as a “piggy bank” by countries who run a trade surplus with it.
Overnight, the president has called for both sides to completely abolish tariffs, subsidies and other trade barriers.Overnight, the president has called for both sides to completely abolish tariffs, subsidies and other trade barriers.
That would certainly shake globe trade up - but is hardly something that Juncker can sign off during a quick chat in the Oval Office.That would certainly shake globe trade up - but is hardly something that Juncker can sign off during a quick chat in the Oval Office.
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!
The stakes are high, though. Trump has already angered Europe by imposing tariffs on steel and aluminium, which led to Europe putting 25% tariffs on bourbon whiskey, peanut butter, motorcycles and blue jeans.The stakes are high, though. Trump has already angered Europe by imposing tariffs on steel and aluminium, which led to Europe putting 25% tariffs on bourbon whiskey, peanut butter, motorcycles and blue jeans.
A rocky meeting could shake the financial markets, warns Lukman Otunuga, Research Analyst at FXTM:A rocky meeting could shake the financial markets, warns Lukman Otunuga, Research Analyst at FXTM:
With escalating trade tensions between the European Union and the United States still a key theme that continues to weigh on global sentiment, the outcome of today’s meeting could leave a lasting impact on the markets.With escalating trade tensions between the European Union and the United States still a key theme that continues to weigh on global sentiment, the outcome of today’s meeting could leave a lasting impact on the markets.
If the talks prove unsuccessful and trade tensions end up escalating further, risk sentiment is likely to be negatively impacted. Market players should be prepared to expect the unexpected from the talks, especially when considering how highly unpredictable the Trump administration can be.If the talks prove unsuccessful and trade tensions end up escalating further, risk sentiment is likely to be negatively impacted. Market players should be prepared to expect the unexpected from the talks, especially when considering how highly unpredictable the Trump administration can be.
The agenda:The agenda:
9am BST: German IFO expectations survey9am BST: German IFO expectations survey
11am BST: CBI survey of UK retail sales in June11am BST: CBI survey of UK retail sales in June
6.30pm BST (1.30pm EDT): President Trump and president Juncker meet at the White House6.30pm BST (1.30pm EDT): President Trump and president Juncker meet at the White House