Welcome back to our daily review of macroeconomic and geopolitical news impacting financial markets around the world. Today, the trade sanctions ax fell as much on the United States as on China while Europe reassures itself thanks to Germany.
China/US. Only two hours after Washington started, China has responded with its tariffs on $ 34 billion worth of US products. Donald Trump even mentioned the possibility of taxing $ 500 billion of Chines products an amount equivalent to the total imports from China in 2017. Ever increasing. The escalation is far from over.
Despite strong economic indicators, the Fed has said it is "concerned" about the US president's trade policy and fears "negative effects" on the economy in the long run. The central bank's concerns may, however, fall on deaf ears.
Germany. The Grand Coalition finally reached an agreement on immigration; the Social Democrats (SPD) finally reunited with the two conservative parties (CDU/CSU). They agreed on the proposal of a new law on the control of immigration by the end of the year, anticipating the acceleration of asylum procedures without mentioning border transit centers. As SPD leader Andrea Nahles said, this is the end of a "play this country did not need".
France. The trade deficit widened substantially in May while it was stable the previous three months reaching 6 billion euros, its highest level since February 2017. The Customs office explains that the country's export is penalized by the weaker performance of the aeronautics, space, and automotive sectors. Nevertheless, without taking the transport industry into account (as it a more cyclical sector,) France's export is going in the right direction.