The United States and China agreed on Saturday to resume trade negotiations after President Trump offered concessions to President Jinping when the two met at the G20 summit in Japan. No new tariffs and an easing of restrictions on Chinese tech company Huawei were agreed in order to reduce tensions with Beijing. On the other end, China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.
The Brexit impasse and poor weather conditions caused the worst three months for the British private sector in nearly seven years the Confederation of British Industry said yesterday. The data comes as a disappointment after markets were upbeat following a previous surge caused by companies stockpiling ahead of the original March 29 Brexit deadline. In June, the private sector contracted at the quickest pace since September 2012 and growth sank to -13%, according to the CBI’s monthly Growth Indicator. The Bank of England has said it expects zero growth in the economy in the second quarter, reflecting the adjustment expected from the stockpiling boost in the first three months of the year, uncertainty about the Brexit outcome and slower global growth. Factories also showed the weakest picture for export orders in four years in the April-June period but were helped by a slight pick-up by services firms.
Big manufacturers’ confidence suffered a hit in Japan keeping pressure on the central bank to maintain the current massive stimulus programme. After tensions between the U.S. and China, another trade dispute has hit the country as curbs on high-tech material exports used in smartphone displays and chips to South Korea have been implemented over disputes of South Koreans forced to work for Japanese firms during World War Two, the Japanese industry ministry said on Monday. Japan rejected South Korea’s proposal last month to create a joint compensation fund for victims with contributions from both nations’ companies. South Korea’s deputy minister for trade said Japan’s measures would violate World Trade Organization rules and Seoul would respond. Japanese manufacturing activity contracted in June to hit a three-month low offering fresh evidence of an economy under the pump.
Brazilian President Jair Bolsonaro said that it could take up to three years for the free-trade deal agreed by the European Union and South American bloc Mercosur to come into force, as the deal need to be approved by lawmakers of all countries involved but he added that the Brazilian Congress would be the first to approve the EU-Mercosur treaty. Last Friday, EU and Mercosur concluded two decades of talks, committing to more open markets in the face of a rising tide of protectionism. The deal was criticised by Greenpeace activists concerned about its threat to natural habitats in Latin America.