Tag: European Union

Stock Market Falls as Trump threatens tariffs on $11 billion of EU goods

U.S. stocks closed lower Tuesday, with the S&P 500 snapping its eight-day winning streak, on fears over escalation of trade tensions with the European Union and a weaker global outlook from the International Monetary Fund.

How did the benchmarks fare?

The Dow Jones Industrial Average DJIA, -0.72%  dropped 190.44 points, or 0.7%, to close at 26,150.58, while the S&P 500 index SPX, -0.61% fell 17.57 points. or 0.6%, to 2,878.20. The Nasdaq Composite Index COMP, -0.56% declined 44.61 points, or 0.6%, to 7,909.28.

What drove the market?

The office of the U.S. Trade Representative threatened to levy tariffs on many European goods late Monday. The threat is a retaliation against European companies’ subsidies for aircraft manufacturer Airbus SE EADSY, -1.82% If the U.S. follows through, the proposed tariffs would affect about $11 billion in imports to the U.S., including helicopters, bicycles, cheese and wine.

Lighthizer said the Trump administration would wait for World Trade Organization clearance to implement the duties. President Donald Trump Tuesday morning tweeted that the EU has taken advantage of the U.S., adding that it would “soon stop!”:

The U.S.-EU tensions comes with the administration reportedly close to resolving a yearlong spat with China, which has roiled markets amid fears the clash between the world’s largest economies could disrupt global economic growth.

The IMF lowered the outlook for global economic growth in 2019 to 3.3% from 3.5% projected in January, marking its third reduction of growth expectations in six months. The decline has been broadly felt, with all advanced economies, including the U.S., and most major emerging-market economies seeing deterioration in their outlook.

Meanwhile, data pointed to a tightening of the U.S. labor market. The number of job openings in the U.S. fell by 538,000 to 7.1 million on the last business day of February, marking the smallest number of job openings since March of 2018.

The National Federation of Independent Business’s small-business optimism index edged up 0.1 point to a seasonally adjusted 101.8, marking the third month in a row in a narrow range.

What were strategists saying?

“The tariff threat is probably what’s moving markets negatively,” Karen Cavanaugh, senior market strategist with Voya Investment Management, told MarketWatch, though she noted that tariffs being discussed are relatively small. “We’re in an information vacuum before earnings season, and right now any little thing could move markets until we get something substantial to sink our teeth into.”

“Sentiment in continental Europe is holding up well, considering the heightened tensions between Washington, D.C., and Brussels in relation to the threat of $11 billion worth of tariffs being imposed on European imports,” wrote David Madden, market analyst at CMC Markets, in a research note.

Which stocks were in focus?

Apple Inc. AAPL, -0.30%  surrendered early gains to fall 0.3%, bringing its nine-day win streak to a close as its effort to reclaim $1 trillion in market cap took a pause.

Shares of Wynn Resorts Ltd. WYNN, -3.86% dropped 3.9% after the company terminated talks to purchase Australia’s Crown Resorts.

Shares of Paris-listed Airbus SE AIR, -1.86%  were off 1.9% amid the U.S. tariff threat. U.S. listed shares EADSY, -1.82% also fell 1.8%.

Avaya Holdings Corp. AVYA, +4.17% shares gained 4.2% after Bloomberg reported that the communications software company is organizing a sales process for the company, following the receipt of unsolicited bids.

General Electric Co. GE, -2.85% shares slid 2.9% a day after J.P. Morgan analyst Stephen Tusa downgraded the stock.

Shares of American Airlines Group Inc. AAL, -1.68% fell 1.7% after the company cut its first quarter guidance.

How were other markets trading?

Markets in Asia closed on a mixed note, with Japan’s Nikkei 225 NIK, -0.61%adding 0.2%, Hong Kong’s Hang Seng Index HSI, -0.35% rising 0.3%, while the Shanghai Composite Index SHCOMP, -0.39% lost 0.2%. European stocks were lower, with the Stoxx Europe 600 SXXP, -0.47% down 0.5%.

In commodities markets, the price of oil CLK9, +0.19% retreated from five-month highs, while gold futures GCM9, -0.13% settled higher. The U.S. dollarDXY, +0.02% was mostly unchanged.

[MarketWatch]

Trump ‘went off’ on French president during face-to-face meeting

US President Donald Trump was “ranting and venting on trade” to French President Emmanuel Macron during their bilateral meeting Monday evening, according to a senior diplomatic source.

Trump lambasted the European Union for its trade policies, saying it was worse than China — a complaint that the US president made to his French counterpart in an April meeting at the White House.

The source described Trump as “going off” on EU trade during his meeting on the sidelines of the United Nations General Assembly. Trump said that the EU had to open up on agriculture — a continued point of contention in trade negotiations between the two entities. Macron was respectful to Trump and pushed back some on the topic but moved the conversation forward, the source said.

There was “some rapport” between the two, “but it’s not what it (once) was,” the source said.

Trump and Macron also talked about Iran and North Korea, during which Trump expressed his views in what the source described as “very predictable terms.”

The next day, Macron delivered a pointed rebuke to Trump in his speech at the UN General Assembly, both directly and implicitly criticizing the administration for its policies on Iran, climate change, the UN, migration and Mideast peace.

Macron began by telling the assembly that the world order based on sovereignty and equality among nations that came into being in the 1600s was facing a “far-reaching crisis,” and said the answer lay in cooperation and collaboration among nations.

“Nationalism always leads to defeat,” said Macron, who couched his remarks in the historical context of Europe’s world wars. “If courage is lacking in the defense of fundamental principles, international order becomes fragile and this can lead as we have already seen twice, to global war. We saw that with our very own eyes.”

On trade, Macron declared, “bilateral agreements, new protectionisms, will not work.”

The French President has made no secret of his disagreements with the US President. In April, during Macron’s first state visit as president to the US, he contradicted Trump on several fronts in a speech before Congress.

“There is no planet B,” Macron told lawmakers, referring to Trump’s decision to pull out of the Paris climate agreement.

Macron’s visit to the White House in April also included efforts to persuade Trump to save the Iran deal, which the US President ultimately announced his intention to withdraw from in May.

Before the cracks started to appear in their relationship, Macron had been dubbed by some observers as the “Trump whisperer,” after the two appeared to form a close bond during Trump’s visit to Paris last year.

[CNN]

The EU reportedly used colorful flash cards to explain trade policy to Trump

European Commission President Jean-Claude Juncker reportedly used colorful cue cards to explain issues of global-trade policy to President Donald Trump during their meeting earlier this week.

According to a report from the Wall Street Journal on Thursday evening, Juncker and his team used the cards to simplify complex issues for the president as a means of getting their points across as effectively as possible.

The Journal’s report says Juncker “flipped through” more than a dozen cards, which had minimal information on them, and all focused on a single issue. These included the automotive trade, and regulatory standards for medicines, the report added, saying that there were a maximum of three figures per card.

“We knew this wasn’t an academic seminar,” a senior EU official who was at the meeting told the Wall Street Journal. “It had to be very simple.”

Trump and Juncker on Wednesday agreed to the beginnings of a deal that would end the previously growing trade tensions between the US and the EU.

During the meeting, the EU agreed to import more American soybeans and liquefied natural gas. Both sides agreed to work to decrease industrial tariffs and adjust regulations to allow US medical devices to be traded more easily in European markets.

“This was a very big day for free and fair trade,” Trump said at a press conference after the pair’s meeting.

The EU’s use of flash cards is not without precedent. Trump is well-known for his distaste for lengthy documents, and is said to prefer single-page memos when deciding on policy.

In May 2017, a report from Reuters said that Trump likes “single-page memos and visual aids like maps, charts, graphs and photos.” A source quoted by Reuters said aides also strategically put Trump’s name into “as many paragraphs as we can because he keeps reading if he’s mentioned.”

[Business Insider]

Trump Touts U.S. Being ‘Back on Track’ With the EU After Meeting With Juncker: We ‘Love Each Other’

President Donald Trump said during a White House event today the U.S. will be working with the EU to address the current trade dispute, and tonight he touted how things are “back on track.”

Trump met with European Commission President Jean-Claude Juncker today and he’s tweeting that it was a big success:

Trump also shared a picture of himself and Juncker:

[Mediaite]

Reality

Trump claimed the EU promised to purchase more soybeans and that made it all worth it, but the EU doesn’t buy goods such as produce, individual European countries do.

EU officials confirmed the Trump/Juncker agreement is nothing more than a political pledge by the EU not to do anything that affects the market conditions responsible for European countries buying more beans.

We alienated friends, trashed our reliability in front of the world, made us all pay more with his taxes on us, cost American jobs, all so soybean farmers could sell a few more barrels they were already going to sell to the EU anyway.

Got it.

Trump-Created European Trade Crisis Averted by Fake Deal

Last night, the Trump administration announced with maximum fanfare that the trade war with the European Union was over. “This was a big day for free and fair trade!,” tweeted an excited President Trump. For all the hype and surprisingly credulous press the announcement attracted, it amounts to little more than a face-saving truce. If you’re looking for any details as to how this will work, too bad, they don’t exist.

The trade “deal” follows the script of the ballyhooed North Korean nuclear “deal” from last month. The cycle begins with bellicose Trumpian threats designed to increase American leverage. This leads to negotiations, which produce an impossibly ambitious and thoroughly vague “solution” that allows Trump to boast that he has averted a crisis of his own making.

In North Korea’s case, the “agreement” involves a nonverifiable promise to denuclearize the Korean peninsula at some future date. The trade “deal” is a promise to eliminate tariffs between the United States and the European Union. In theory, it would be possible to eliminate all tariffs between the E.U. and the U.S., but the process would take many years to complete — the European Union has 28 member states, all of which have internal political dynamics and constituent business interests to navigate.

In the meantime, the practical meaning of Trump’s deal is that both sides will halt the cycle of retaliatory tariffs. Despite Trump’s belief that his methods had produced valuable leverage for his own position, the spat had imposed acute pain on his own constituents — especially farmers, who have suffered dire costs from retaliatory tariffs. The president had taken to pleading with his supporters to stop complaining and let him sue for peace:

He was begging his allies to stop complaining about the tariffs. Like a dog!

Trump’s campaign adviser Stephen Moore told the Washington Post yesterday, “The one thing I do know about Trump is that he’s not going to back down.” Characteristically, the one thing Moore knows turned out to be completely false.

But it is easy to see how Trump plans to turn this shambolic retreat into another famous victory. Begin with the assumption that the European Union has been screwing the Great Companies of the United States with one-sided and very, very unfair tariffs for decades. (This is not true.) Then proceed to the assumption that Trump has produced a deal to eliminate all these tariffs. (Completely unrealistic.) By stacking the two fantasies atop each other, you arrive at a reality in which Trump has made a Great Deal to make Americans win again.

http://nymag.com/daily/intelligencer/2018/07/trump-created-european-trade-crisis-averted-by-fake-deal.html

Trump: Tariffs are ‘the greatest,’ president says ahead of EU chief’s visit

“Tariffs are the greatest!” Trump said on Twitter, following up with what he called a simple choice: “Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs.” He added, “It’s as simple as that — and everybody’s talking!”

His tweet came one day before EU President Jean-Claude Juncker is scheduled to visit the White House for discussions on trade and other matters. Trump has imposed tariffs on imports of steel and aluminum and threatened new ones on cars. Juncker will reportedly focus on arguing that the EU is Washington’s friend, not foe.

[Marketwatch]

Trump: ‘What You’re Seeing and What You’re Reading Is Not What’s Happening’

President Donald Trump defended his tariffs today in a speech to the VFW with multiple shots at the “fake news,” including a pretty remarkable line about how people shouldn’t believe any of it.

Trump said people shouldn’t “believe the crap you see from these people, the fake news” before defending the tariffs.

He talked about China, called the EU a “big abuser,” and then said, “But it’s all working out. And just remember, what you’re seeing and what you’re reading is not what’s happening.”

“What you’re seeing and what you’re reading is not what’s happening.”

You can watch Trump actually saying that above, via Fox News.

[Mediaite]

Reality

“The party told you to reject the evidence of your eyes and ears. It was their final, most essential command.”

—George Orwell

Theresa May: Trump told me to sue the EU

Donald Trump told Theresa May she should sue the EU rather than negotiate over Brexit, she has told the BBC.

The US president said on Friday at a joint news conference he had given Mrs May a suggestion – but she had found it too “brutal”.

Asked by the BBC’s Andrew Marr what it was he said, she replied: “He told me I should sue the EU – not go into negotiations.”

It came as another government member resigned over her Brexit plans.

Robert Courts said he quit as a Parliamentary Private Secretary – an unpaid Parliamentary aide – at the foreign office to “express discontent” with Mrs May’s policy before key Brexit votes on Monday.

“I had to think who I wanted to see in the mirror for the rest of my life,” he said in tweet.

He could not tell his constituents he supported Mrs May’s proposals “in their current form,” he added.

Mr Courts replaced David Cameron as the Conservative MP for Witney, Oxfordshire in 2016.

[BBC]

“I think the European Union is a foe,” Trump says ahead of Putin meeting in Helsinki

Coming off a contentious NATO summit and a trip to the U.K. in which he seemed to undercut the government of America’s closest ally, President Trump took aim at another Western institution just days before his high-stakes meeting with Russian President Vladimir Putin.

In an interview with “CBS Evening News” anchor Jeff Glor in Scotland on Saturday, President Trump named the European Union — comprising some of America’s oldest allies — when asked to identify his “biggest foe globally right now.”

“Well, I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade. Now, you wouldn’t think of the European Union, but they’re a foe. Russia is foe in certain respects. China is a foe economically, certainly they are a foe. But that doesn’t mean they are bad. It doesn’t mean anything. It means that they are competitive,” Mr. Trump said at his golf club in Turnberry, Scotland.

“I respect the leaders of those countries. But, in a trade sense, they’ve really taken advantage of us and many of those countries are in NATO and they weren’t paying their bills,” he added.

On Sunday, British Prime Minister Theresa May told the BBC that Mr. Trump had encouraged her to “sue the EU” rather than negotiate over the U.K.’s departure from the bloc. May’s conservative government is deeply split over her handling of Brexit, and her hold on power was further weakened by Mr. Trump’s comments to a British tabloid that her approach had likely “killed” any chance of a new trade deal with the U.S. once Brexit is complete. (Mr. Trump tried to walk back his criticism in a joint press conference on Friday.)

At the summit of NATO allies in Brussels last week, Mr. Trump took a hard line toward member nations for failing to meet targeted defense spending goals. He claimed his tough stance had paid off in getting allies to spend more on defense, telling reporters on Thursday that members had “upped their commitments and I am very happy.”

The president kicked off the NATO summit by blasting Germany as “totally controlled” and “captive by Russia” over a natural gas pipeline project, known as the Nord Stream 2. The U.S. fears the deal could give Moscow greater leverage over Western Europe. In Saturday’s interview, the president reiterated the criticisms he made in Brussels.

“Germany made a pipeline deal with Russia. Where they’re going to be paying Russia billions and billions of dollars a year for energy, and I say that’s not good, that’s not fair. You’re supposed to be fighting for someone and then that someone gives billions of dollars to the one you’re, you know, guarding against. I think it’s ridiculous, so I let that be known also this time,” Mr. Trump told Glor. “I’ll tell you what, there’s a lot of anger at the fact that Germany is paying Russia billions of dollars. There’s a lot of anger. I also think it’s a very bad thing for Germany. Because it’s like, what, are they waving a white flag?”

German Chancellor Angela Merkel, who grew up in communist East Germany, told reporters after the president’s comments in Brussels that she had “experienced myself how a part of Germany was controlled by the Soviet Union” and said her country today made “independent policies” and “independent decisions.

In the CBS News interview, Mr. Trump also continued to criticize the special counsel’s Russia investigation, saying it is having an impact on America’s standing in the world. “I think we’re greatly hampered by this whole witch hunt that’s going on in the United States,” the president said. “I think it hurts our relationship with Russia. I actually think it hurts our relationship with a lot of countries. I think it’s a disgrace what’s going on.”

Mr. Trump heads to Helsinki on Sunday ahead of his meeting with Putin on Monday. He told Glor he has “low expectations” for the summit. “Nothing bad is going to come out of it, and maybe some good will come out,” he said.

[CBS News]