Today the Podcast Podcast Economy
At G7, Donald Trump blows hot and cold on global trade
Still no truce in sight in the trade war between China and the United States. On the contrary: in Biarritz, where the G7 summit has been held since Saturday, Donald Trump fuels the ire over this increasingly threatening conflict for the global economy.
All other leaders present wish for a return to calm and reason after the new reprisals against China announced by President Trump before his arrival in Biarritz. The most motivated is the host of the summit, President Emmanuel Macron.
For his part, the representative of the European Union Donald Tusk played collective, expressing his determination to protect the French wine, once again threatened by US taxes just before the opening of the summit. Even the bustling Boris Johnson, the new British pro-Brexit Prime Minister who overestimates the complicity with the US president has clearly positioned himself as favorable to commercial peace.
But all these messages slipped on Donald Trump. And again, he chained disturbing statements, forcing the White House to reinterpret his remarks. In fine this is what we had to understand: the president regrets not having raised more taxes on Chinese products and he finds the current escalation so worrying that it could make it a national emergency. Not very reassuring.
Donald Trump very enthusiastic about Japan and the United Kingdom
With Japan, Donald Trump announces having completed a very large commercial agreement. An exaggerated qualifier from the Japanese point of view since cars built in the archipelago for the American market are excluded. An agreement basically conforms to Washington's new requirements. The warrior rhetoric widely used with China is also a very effective deterrent with other partners, with countries preferring to find a compromise to avoid the wrath of Washington.
As for the quick agreement promised to the British, he leaves Boris Johnson dubitatitf. Not sure, says the latter, that a big deal is signed after only one year of negotiation.
Finally, Donald Trump also managed a nice shot with his threats against French wine. According to our colleagues, the French tax on the Gafa which insupports the American president could be quickly replaced by a more general tax on the multinationals, negotiated in the framework of a Franco-American bilateral agreement.
A G7 synonymous with failure?
Emmanuel Macron's G7 report on commercial diplomacy is rather weak. Especially since he too seems to have opted for the use of the commercial weapon. After defending the free trade agreement signed by Europe with Mercosur, it is now threatening to block it. Jair Bolsonaro lied, accuses Emmanuel Macron, because it remains inactive in the face of climate change. Amazing declarations, the Brazilian president has never hidden his contempt for the environmental cause.
Not sure that this French veto really impresses the Brazilian president: with the Sino-US trade war, the ties of his country with China are growing day by day, to the satisfaction of soy producers that the Chinese are now buying rather in Brazil than in the United States. Meanwhile, the Amazon rainforest burns and the prospect of a recession weighs more and more on all the economies of the planet.
In short,
The yuan, the Chinese currency, has fallen to its lowest level since 2008 against the dollar
It is obviously the escalation of trade tensions that weakens the yuan, a currency still tightly controlled by the Chinese authorities. And then also note in the wake, the blues of the Hong Kong Stock Exchange, down 3% at the opening. Moreover, this morning, Beijing says it wants to calmly exit the conflict ... commercial!