Trade Truce: China’s cabinet has proposed plans that would undo the 40% import duty China imposed on US cars this summer, and reduce it to 15%, which is the same tariff levied on car imports from other countries.On December 13, China purchased over 1.5 million tons of soybeans from the US, the first major purchases of U.S. soybeans since President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce earlier this month. Meng Wanzhou, chief financial officer of the Chinese telecom group Huawei, was detained at Vancouver airport last week over violating Iran Sanctions. China has since responded by detaining to Canadian citizens, after warning of ‘serious consequences’ for Ottawa following Wanzhou’s arrest.
US- EU: The Office of the US Trade Representative listened to 35 witnesses representing various industry groups on what a US-EU trade deal should look like, ahead of formal negotiations that could start as soon as mid-January. (Politico)
Brexit: On December 10, the European Court of Justice ruled that the UK could end Brexit unilaterally by revoking the notification of its intention to withdraw from the EU. UK Prime Minister Theresa May called off a crucial vote in Parliament, that was set for December 11, on whether to approve her Brexit deal. In May’s tour of Europe to try and secure further concessions on her Brexit deal, German Chancellor Angela Merkel told May that there’s no possibility to amend the EU’s exit agreement with the UK. May won a vote of no confidence 200-117 on December 12.
US: Outgoing IMF Chief Economists, Maurice Obstfeld warned that global growth is slowing and the U.S. will likely feel the drag as well. However, in an interview on December 9, Christine Lagarde, managing director and chairwoman of the International Monetary Fund (IMF), said she sees no indications the American economy is heading towards a recession in the near future, despite a recent stock market slump and slower job growth.
EU-Japan: European Parliament backed the trade deal with Japan that will create the world’s largest free trade zone early next year. The two economies account for about a third of global GDP.
Official Statement: US Beef Gains New Market Access in Morocco, Office of the United States Trade Representative
News: Trump Gets Win As Xi Makes Good on Pledge to Buy US Soy, Bloomberg
News: China to ‘Cut US Car Tariff to 15%’, BBC News
News: US Maintains Hard Line as Details Emerge in Trade Truce with China, Lingling Wei and Bob Davis, Wall Street Journal
Analysis: Why the U.S. Needs Allies in a Trade War Against China, Chad P. Bown, Harvard Business Review
Analysis: Trade War Has Given Agricultural Merchants a Boost, The Economist
News: Trade War Update: China Subverts Tariffs, Trade Gap Gets Wider, Kenneth Rapoza, Forbes
Analysis: The Surprising Beneficiaries of a Trade Feud, Aaron Back, Wall Street Journal
Analysis: Washington Tariff Relief Backlog Hobbles US Auto Suppliers, Ed Crooks and Fan Fei, Financial Times
Analysis: Trump Can Push Congress on NAFTA, But Congress Can Push Back, Gary Clyde Hufbauer, Peterson Institute for International Economics
Opinion: Trudeau Could Help the USMCA Cross the Congressional Finish Line, Michael Taube, Washington Post
News:So Much for a ‘Santa Rally’: Trump’s Trade War is Sending the S&P 500 Toward Its Worst December Since 2002, Callum Burroughs, Business Insider
FACTOID OF THE WEEK:
Did you know…that the European Council recently endorsed the agreement reached with the European Parliament on the EU budget for 2019, which prioritizes smart and inclusive growth with a commitment of €80.5 billion? Find more info here.
Discussion Paper: Testing the Resilience of Europe’s Inclusive Growth Model, Jacques Bughin, Jan Mischke, Tilman Tacke, Eric Hazan and Pal Erik Sjatil, McKinsey Global Institute
Report: Trade and Poverty Reduction, World Trade Organization and World Bank Group
Report: Implementing the Global Compact for Migration: Ideas for City Engagement, Jessica Brandt, Brookings Institute
News: More than 150 Governments to Adopt UN Migration Pact in Morocco, Ulf Laessing and Andreas Rinke, Reuters
Analysis: How a World Order Ends, Richard Haass, Foreign Affairs
News: Working to Ensure the ‘Year of the Woman’ Is More Than Just One Year, Kate Zernike, New York Times
WHAT WE ARE READING:
Report: Three Approaches to Fixing the World Trade Organization’s Appellate Body: the Good, the Bad and the Ugly? Jennifer Hillman, Institute of International Economic Law, Georgetown University Law Center
Analysis: Trump’s War on Huawei Splits Europe, Laurens Cerulus, Politico
News: French Riots Hand Italy New Ammunition in Budget Tussle, Chiara Albanese and John Follain, Bloomberg
News: Senate Bill Targets Chinese Economic Espionage, Elias Groll, Foreign Policy
Analysis: Quick Take: Your Primer on Brexit – Why It Matters for US Businesses, US Chamber Staff, US Chamber of Commerce
Opinion: Brexit? Britain’s Divides Run Far Deeper Than That, John Harris, The Guardian
Analysis: After Brexit: Alternate Forms of Brexit and Their Implications for the United Kingdom, European Union, and the United States, Charles P. Ries, Marco Hafner, Troy D. Smith, Frances G. Burwell, Daniel Egel, Eugeniu Han, Martin Stepanek and Howard J Shatz, RAND
December 17: The Future of US Policy in Syria, Atlantic Council
Your Newsletter Team:
Marie Kasperek, Associate Director, Global Business & Economics, Atlantic Council
Christina Gay, Intern, Global Business & Economics, Atlantic Council
Raina Hasan, Intern, Global Business & Economics, Atlantic Council
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