Trump-Juncker: At a joint press conference following a meeting at the White House on July 25, EU Commission President Jean-Claude Juncker and President Donald Trump announced a deal to strengthen their trade relations. The US agreed not to impose car tariffs on the EU while the two parties are negotiating. They also agreed to look into revoking the steel and aluminum tariffs as well as the EU retaliation to these. Both parties proposed an executive working group on WTO reform with like-minded partners. Read the full joint statement here.
US: On July 24, the Trump Administration announced up to $12 billion in emergency aid to farmers adversely affected by the escalating trade war. Farmers can begin receiving bailout payments in September, ahead of midterm elections in November.
Meanwhile, tariff hearings have been ongoing. On July 24 and 25, the US Trade Representative heard testimony on the proposed second list of Section 301 tariffs against China, totaling $16 billion of trade. On July 19, the Department of Commerce held hearings on Section 232 national security tariffs for autos.
NAFTA: According to some sources, NAFTA teams ready to ‘start solving’ stalled issues and hope to reach a deal as soon as by the end of August.
Brexit: The EU’s chief negotiator, Michel Barnier has ruled out a recent customs proposal by PM Theresa May- read the full story here.
Was the Trump-Juncker Meeting Really a Success?
by David Wemer
US President Donald J. Trump and European Commission President Jean-Claude Juncker attempted to tamp down on trade tensions between the United States and the European Union at their meeting on July 25. While they reached an agreement to work towards zero tariffs and avoid implementing new tariffs while negotiating a broader deal, this step in the right direction should be viewed with caution. In thispiece, our Atlantic Council experts weigh in on the issues raised in the press briefing, put them into a larger context- and explain how feasible each of the elements will be to put into practice.
Trade in Services Agreement: A Way Out of the Trade War
by Barbara C. Matthews, Earl Anthony Wayne, and Cecilia Pan
Dubbed “The Most Important Free Trade Agreement You’ve Never Heard Of,” the Trade in Services Agreement (TiSA) could promote global growth and prosperity by liberalizing trade in services. Amidst escalating trade war tensions between the US, EU, and China, why reenergizing this multilateral agreement could be a way forward. Read here.
US Iran Sanctions Could SpOIL the Global Economy
by Ole Moehr
The Trump Administration’s “maximum pressure” approach against Iran to reduce Iranian crude oil exports to zero as soon as possible is expected to rattle markets, tightening supply, and raising the price at the pump. Meanwhile, China has indicated it will not stop importing Iranian oil and US sanctions against the People’s Bank of China could throw the global economy into turmoil. Read more here.
Official Remarks: Remarks by President Trump and President Juncker of the European Commission in Joint Press Statements, The White House
Press Release: United States and New Zealand Meet Under Trade and Investment Framework Agreement, Office of the United States Trade Representative
Official Remarks: Transatlantic Trade in Turbulent Times, Cecilia Malmström, European Commission
Speech: The Case for Free Trade, Liam Fox, Heritage Foundation
Interview: WTO Is Not Broken, Says WTO Director Roberto Azevedo, CNBC
News: Consumers, Soybeans Lift U.S. Economic Growth to 4.1 Percent, Lucia Mutikani, Reuters
Opinion: How the Trump-Juncker Meeting could Lead to a Trade-War Truce, Marie Kasperek, MarketWatch
Opinion: The EU Will Stand Up for Rules-Based Trade, Cecilia Malmström, Financial Times
Interview: How New Tariffs Are Impacting US Businesses, Shawn Donnan, Chad Brown, 1A
Analysis: Lasting Peace Is Still Distant in US Trade War with EU, Shawn Donnan and Jim Brunsden, Financial Times
News: White House Readies Plan for $12 Billion in Emergency Aid to Farmers Caught in Trump’s Emergency Aid to Farmers Caught in Trump’s Escalating Trade War, Damian Paletta and Caitlin Dewey, Washington Post
Analysis: Federal Aid for Farmers Is Nothing New, But Trump’s Bailout Is, Tami Luhby, CNN
News: Trump Says He’s ‘Ready’ to Put Tariffs on All $505 Billion of Chinese Goods Imported to the US, Jeff Cox, Yahoo!
Analysis: How Trump Is Repelling Foreign Investment, Adam S. Posen, Foreign Affairs
Analysis: What Does Trump Really Want on Trade? It’s Time to Take Him Literally, Phil Levy, Forbes
News: G-20 Finance Ministers, Failing to Halt Trump’s Trade War, Warn of Its Global Risks, Alan Rappeport, New York Times
Analysis: Trade Fight Poses Big Risks for Smaller Countries, Jason Douglas, Wall Street Journal
Policy Brief: Germany’s Current Account and Trade Surpluses, Katharina Gnath, Michael McKeon, and Thieß Petersen, Bertelsmann Foundation
Report: From Parts to Products: Why Trade Logistics Matter, Jean-Francois Arvis, Lauri Ojala, Christina Wiederer, Ben Shepherd, Anasuya Raj, Karlygash Dairabayeva, and Tuomas Kiiski, The World Bank
News: Abe Lieutenant Pours Cold Water on US-Japan Trade Deal, Connor Cislo and Emi Nobuhiro, Bloomberg
News: China’s Latest Trade Partner in Africa Could Help It Export to the US, Justina Crabtree, CNBC
News: Brussels Rejects UK’s Financial Services Brexit Plan, Jim Brunsden, Financial Times
Did you know…
That in the United States, July is the most popular month to go on vacation? The US is the second-most productive developed country as measured by GDP per capita, but also one of the few countries that has no mandatory vacation time. As a measure of GDP per hour worked, the US is only marginally more productive than both Germany and France, with US employees working on average 20% more than their French and German counterparts, which both receive a significant amount of vacation time. Read more here.
Analysis: China’s Global Building Spree Runs into Trouble in Pakistan, Jeremy Page and Saeed Shah, Wall Street Journal
Opinion: Why Is Vigorous Economic Competition a Good Thing? The Economist
Analysis: Global Economy Facing Three Key Risks, David Mann, Emerging Market Views
Chart: Supply Chains Based in Modern Slavery May Reach into the West, Data Team, The Economist
Opinion: Reports of Globalization’s Death Are Much Exaggerated, Simon Constable, Forbes
Opinion: Trump’s Emerging Economic Policy: Picking Winners and Losers, Greg Ip, Wall Street Journal
Analysis: US 4% GDP Growth Seen as More ‘Luck of the Draw’ Than New Reality, Sho Chandra, Bloomberg
WHAT WE ARE READING
Official Document: Communique, G20 Finance Ministers & Central Bank Governors Meeting, G20
Press Release: European Commission Publishes Communication on Preparing for the UK’s Withdrawal from the EU, European Commission
Analysis: Theresa May’s Impossible Choice, Sam Knight, The New Yorker
Opinion: Moscow Mystery: Where Did All Its Treasuries Go? Brian Chappatta, Bloomberg
Analysis: ‘Unfair Trade’ Means Different Things to Different People, Jared Bernstein, Washington Post
News: Sanctions Push North Korea’s Economy into Reverse, Jungah Lee, Bloomberg
News: Saudi Arabia to Spend Billions to Revive Foreign Investment, Rory Jones, Margherita Stancati, and Summer Said, Wall Street Journal
July 31: Deterring Russia: Proposed Sanctions Legislation and Implications for Energy, Atlantic Council
July 31: Workshop: How Can Opportunity Zones Drive Capital and Investment in Under-Resourced Neighborhoods? Urban Institute
July 31 (New Delhi): Development Seminar | Indian Monetary Policy in the Time of Inflation Targeting and Demonetisation, Brookings Institute
August 7: The Economic Impact of Fighting Corruption in Guatemala, Center for International and Strategic Studies
August 8 (Aspen): Hurst Lecture Series: Creating Economic Opportunity for More Americans, Aspen Institute
August 9 (Aspen): Future of Work 2.0: Navigating the Transition to New Possibilities, Aspen Institute
Your Newsletter Team:
Marie Kasperek, Associate Director, Global Business & Economics, Atlantic Council
Cecilia Pan, Intern, Global Business & Economics, Atlantic Council
Tristan van Rooden, Intern, Global Business & Economics, Atlantic Council
Please send us suggested news stories, opinion pieces, publications, and upcoming events that you would like us to highlight! Email mkasperek@AtlanticCouncil.org with your ideas and suggestions.
The views expressed in this newsletter and linked external articles and content do not necessarily reflect the opinions of the Atlantic Council, its staff, or its sponsors.
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