TRADE IN ACTION July 18, 2018
US: On July 16, the United States launched five separate trade disputes at the World Trade Organization (WTO) against China, the European Union, Canada, Mexico, and Turkey for their retaliatory measures in response to US steel and aluminum tariffs. In other trade war news, on July 17, the Trump administration initiated a probe into whether uranium imports threaten national security, a move that could lead to tariffs on nuclear power plant fuel.
EU: On July 16, senior officials from the EU and China met in Beijing for the 20th EU-China summit, expressing strong commitment to rules-based global trade and agreeing to cooperate on WTO reform. On July 17, the EU and Japan signed the EU-Japan Economic Partnership Agreement (EPA), eliminating 99% of tariffs between the two parties and creating a free trade zone covering one-third of global GDP and 600 million people. On July 18, the EU imposed provisional safeguard measures in the form of a tariff rate quota on 23 steel products to protect against trade diversion due to US steel tariffs.
Brexit: In London, UK Prime Minister Theresa May dodged another Brexit bullet on July 17. The government nearly defeated a vote launched by pro-EU conservatives that would keep the UK in the EU customs union should a free-trade deal not be reached.
Upcoming: EU Commission President Juncker and EU Trade Commissioner Cecilia Malmstrom will meet with President Donald Trump on July 25 in Washington, DC. On the agenda, improving transatlantic trade amidst ongoing tension from US steel and aluminum tariffs, EU retaliatory tariffs, and the threat of US car tariffs. A Commerce Department hearing on its investigation into whether imports of autos and auto parts are a national security risk will take place on July 19. Subsequent tariffs could take effect as early as August 2018.
Further south, world economy leaders will be in Buenos Aires from July 21 to 22 for the Third G20 Meeting of Finance Ministers and Central Bank Governors. The future of work and infrastructure will be main topics of discussion.
Donald Trump and Theresa May: On the Issues
by Ashish Kumar Sen
President Donald Trump and UK Prime Minister Theresa May attempted to paper over their differences—at least in public—at a joint press conference on July 13. Here’s a look at where the two leaders came out on some key issues as they fielded questions from journalists at the prime minister’s country residence, Chequers.
This is How the Liberal International Order Dies
by Paul D. Miller
NATO is the signature pillar of the liberal international order, given teeth by the presence of US troops on the European continent. Today, the transatlantic alliance—and the liberal international order it underpins—is at its lowest ebb in its 69-year history. Read on about the US and its allies’ shift from cooperative security to rearmament and proliferation here.
Press Release: United States Challenges Five WTO Members Imposing Illegal Tariffs Against US Products, Office of the United States Trade Representative
Press Release: EU and Japan Sign Economic Partnership Agreement, European Commission
Press Release: Fourth Meeting of the US-UK Trade and Investment Working Group, Office of the United States Trade Representative
Press Release: Trade: Commission Imposes Provisional Safeguard Measures on Imports of Steel Products, European Commission
Official Document: Joint Statement of the 20th EU-China Summit, European Council
Speech: A “Crisis Can Bring Good Results,” Alan Wolff, World Trade Organization
News: Key Republican Orrin Hatch Threatens to Check Trump's Tariff Policy, Jacob Pramuk, CNBC
News: Trade War Spills Into Uranium as US Weighs Import Tariffs, Andrew Mayeda and Jim Efstathiou Jr., Bloomberg
Open Letter: A Letter to President Trump from the Auto Sector
News: IMF Warns Trump Trade War Could Cost Global Economy $430bn, Richard Partington, The Guardian
Opinion: Harley, Trump, and Thailand’s $51 Billion Trade Gamble, Andy Mukherjee, Bloomberg
News: China’s Imports to US Ports Start Peaking Early Amid Tariff Threat, Lisa Baertlein, Reuters
Analysis: China’s Strong Economic Growth Figures Belie Signs of Weakness, Keith Bradsheer, New York Times
Analysis: Southeast Asia’s Growth Could Be the Trade War’s Next Casualty, Michelle Jamrisko,
News: NAFTA Talks Can Wrap Up by End of Year, Mexican Ambassador Says, Eleanor Mueller, Politico
Video: Hard Brexit Has 5-7% Negative Impact on GDP Over 15 Years, Stern Says, Bloomberg
Paper: How Preferential is Preferential Trade? Alvaro Espitia, Aaditya Mattoo, Mondher Mimouni, Xavier Pichot, and Nadia Rocha, World Bank Group
TWEET/FACTOID OF THE WEEK
Did you know that...
...Under the African Continental Free Trade Area (AfCFTA) agreement, member states can expect to see intra-African trade double over the next four years? The additional pledged signatures of South Africa and Nigeria, Africa’s two largest economies, this month was a big win for the African Union’s plan to create one of the largest free trade areas in the world. Read more here.
News: Use Vouchers to Combat Grey Economy, EU Report Urges Government, Benjamin Fox, Euractiv
Blog: Real Time Economics: Why the Productivity Gap is Bad for the Global Economy, Wall Street Journal
Analysis: Mini-Grids Could Be a Boon to Poor People in Africa and Asia, The Economist
Analysis: This is How Globalization is Affecting Entrepreneurs, Rhett Power, Forbes
Analysis: The Challenges of Globalization in the Measurement of National Accounts, Brent Moulton and Peter van de Ven, National Bureau of Economic Research
WHAT WE ARE READING
Report: World Economic Outlook Update, July 2018, International Monetary Fund
Analysis: How Monetary Policy Suddenly Became Controversial, Peter Coy, Bloomberg
Tool: The Big Mac Index, The Economist
Opinion: Global Economic Slowdown is Likely and Necessary Later in 2018 or 2019, John Kemp, Reuters
Tool: China Global Investment Tracker, American Enterprise Institute
News: Trump Sides with Putin Over US Intelligence, Jeremy Diamond, CNN
News: Google is Fined $5 Billion by EU in Android Antitrust Case, Sam Schechner and Laurence Norman, Wall Street Journal
July 23: Economic Mobility Around the World: New Data and Evidence, American Enterprise Institute
July 23: A North American Workforce Development Agenda: Better Jobs for a More Competitive Region, Wilson Center
July 24: OECD Expert Briefing: States of Fragility, OECD
July 31: Workshop: How Can Opportunity Zones Drive Capital and Investment in Under-Resourced Neighborhoods? Urban Institute
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
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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