Stock Market News Today 2018/09/02
German business leaders raise alarm over Brexit progress, UK urged to soften position ahead of talks with EU.
German business leaders have raised the alarm over the state of Brexit negotiations and are urging the UK government to soften its position ahead of make-or-break talks with Brussels in the coming weeks.
“We have reached a critical phase. The time that remains is incredibly short,” Joachim Lang, the director-general of Germany’s BDI industry federation, told the Financial Times.
The warning from Berlin echoes concerns expressed last month by the chairman of Keidanren, the influential Japanese business lobby, and highlights growing anxiety among corporate leaders that Britain could topple out of the EU without an accord to smooth the process.
“If there is no agreement by mid-November, German companies will start implementing their emergency plans for a no-deal Brexit,” Mr Lang said. “In a no-deal scenario, and without a transition phase, we would end up with a border and customs regime that no one is prepared for. There would be considerable uncertainty, there would be interruptions to supply chains and the UK industrial base would take a hit.”
Nafta talks break up with no deal, US and Canada vow to resume negotiations next week as sharp differences remain.
US and Canadian officials reached an impasse in talks on a revamp of Nafta on Friday, but vowed to resume negotiations next week, lifting hopes that an agreement ending uncertainty over trade in North America could still be salvaged.
The abrupt pause in the talks followed a souring of the mood surrounding the negotiations on Friday morning, as differences on the substance of the trade deal, as well as a blustery intervention by Donald Trump, weighed on the negotiators.
In public statements on Friday afternoon, both the US and Canada were keen to stress that the breakdown was only temporary, and the prospects of a deal coming together were strong.
“We know that a win-win-win agreement is within reach, and that’s what we are moving towards,” said Chrystia Freeland, Canada’s foreign minister, at a press conference. “With goodwill and flexibility on all sides, I know we can get there.”
US president Donald Trump took a key procedural step in notifying Congress of his “intent to sign a trade agreement with Mexico — and Canada, if its willing — 90 days from now”, suggesting Ottawa was still very much in the game.
Robert Lighthizer, the US trade representative, chimed in, too, saying the talks with Canada had been “constructive and we made progress”.
The fate of Nafta, a 1994 pact that liberalised trade across North America, has been in limbo ever since Mr Trump’s arrival at the White House, after a campaign in which he vowed to renegotiate or scrap it.
It is one of three fronts, on top of the tariff wars with China and tense trade relations with the EU, on which the Trump administration’s protectionist turn has threatened to be most disruptive to the global economy.
China Party journal warns of trade war’s impact on financial stability.
A Chinese Communist Party journal said on Saturday that the country may experience near-term pain from trade friction with the United States, including a negative impact on financial stability, but China’s stable growth trend would not change.
A commentary in the ideological journal Qiushi, or Seeking Truth, warned that trade and economic friction between Washington and Beijing could undermine “China’s economic growth, financial stability, trade and investment, employment and people’s livelihoods,” particularly in industries exposed to tariff action by the United States.
“But at the same time, we must see that the fundamentals of China’s economic development have not changed. In particular, China’s economic structure has been significantly improved in recent years, which has effectively improved its ability to withstand external shocks.”
The United States had “provoked” these frictions, but China would accelerate research and development of core technologies, optimize its industrial structure, promote market diversification, and strengthen support provided by domestic demand to “turn bad into good,” the commentary said.
It said that China’s macroeconomic management had “sufficient policy space” to counter negative impacts, with fiscal policies potentially playing a “greater role in expanding domestic demand and restructuring”.
“Unblocking the transmission mechanism of monetary policy and guiding funds to invest in the real economy, particularly small and micro-enterprises, can alleviate the problem of difficult or expensive financing and strengthen the ability of the financial industry and the real economy to withstand risks,” it said.
“A just cause finds much support, an unjust one finds little,” the commentary said, quoting the Chinese philosopher Mencius. “Over time, Sino-U.S. economic and trade frictions will surely continue to develop in a direction favorable to China.”
In a separate Qiushi commentary on Saturday, Chinese Commerce Minister Zhong Shan called for “proactively expanding imports to promote balanced trade”.
China must “strengthen the protection of intellectual property rights, protect the legitimate rights and interests of foreign investors, and create a good business environment for investing in China,” Zhong wrote.
China will “greatly relax market access” and “steadily expand the opening of the financial industry, continue to promote the opening of the service industry and deepen the opening up of the agricultural, mining and manufacturing sectors,” he said.