TRADE IN ACTION October 12, 2018
World: According to the IMF's October World Economic Outlook report, the global economy is expected to grow at 3.7% this year and next year, down 0.2 percentage points from an earlier forecast in April, as the U.S. and China continue their trade war. During the launch of the World Bank/IMF meetings in Bali, IMF Managing Director Christine Lagarde urged countries to “de-escalate” trade conflicts and fix global trading rules instead of abandoning them.
TradeWar: On October 9, President Trump repeated his threat to impose further tariffs on $267 billion worth of additional Chinese imports if China retaliates. In the US’ latest attempt to push China over its trade practices, the trump administration announced that it would crackdown on foreign investment in sensitive American industries like technology and telecommunications and that it will start using new powers as provided by the Foreign Investment Risk Review Modernization Act Foreign Investment Risk Review Modernization Act that give the United States greater authority to review and block Chinese, and other international, transactions that pose a threat to national security.
Brexit: Former British PM Tony Blair said there was a 50-50 chance of another Brexit referendum given that Prime Minister Theresa May will be unlikely to secure a parliamentary majority for an exit deal.
Next Week: The Treasury Department unveils its semiannual report on foreign exchange rate practices on Monday while the EU will adopt the EU-Vietnam agreement in order to start the ratification process. US Commerce Secretary Ross will meet Commissioner for Trade Cecilia Malmström, Commission Vice Presidents Jyrki Katainen and Andrus Ansip to talk tradem the economy, and transatlantic digital issues between October 16-18.
US-China: Presidents Trump and Xi Jinping are likely to meet at a multilateral summit in late November.
US-Philippines: The US and Philippines plan to announce the start of their free trade negotiations in November.
World Economic Outlook: Trade Tensions and Tariffs a Major Threat to Global Economic Growth
By Marie Kasperek
While this October’s World Economic Outlook report still predicts a steady expansion for 2018-19 at a 3.7 percent growth rate, this forecast is 0.2 percent lower than in April. One of the major reasons for this downward correction are recent trade policies which are expected to continue to be a downward risk leading to further disruption, uncertainty, and weaker growth. Atlantic Council's Marie Kasperek argues that the biggest risk in the next months might not be of economic nature. For more insight, click here.
For a brief video analysis of the World Economic Outlook, check out our interview with Bart Oosterveld, Director of the Atlantic Council's Global Business and Economics Program.
Report: World Economic Outlook, October 2018, International Monetary Fund
Speech: How Global Trade Can Promote Growth for All by Christine Lagarde, International Monetary Fund
News: Unique Business Initiative to Support Reform Process of Multilateral Rules-Based System Launched, Dawn Chardonnal, International Chamber of Commerce
News:U.S. and China Jockey for Global Support as Trade War Ramps Up , Andrew Mayeda and Enda Curran, Bloomberg
Analysis: Why It’s Time To End the Tit-for-Tat Tariffs in the U.S.-China Trade War, David Dollar and Peter A. Petri, Brookings Institute
News: Trump Trade War Delivers Farm Boom in Brazil, Gloom in Iowa, Jake Spring and Tom Polansek, Reuters
Analysis: US-China Trade War Weaponizes Liquefied Natural Gas,Takeshi Kumon, Asian Nikkei Review
Analysis: Trump’s China Trade War is Hurting the Global Economy, Alex Ward, Vox
Opinion:Trump’s Tariffs Echo the US Trade Policy that Led to the Great Depression, John Mauldin, Forbes
News:Global Carmakers Rattled by Stalling China Market, Tom Hancock, Financial Times
Analysis: Why Germany Is Betting on Trade With China, Jing Yang De Morel, Chris Reiter, David Verbeek and Arne Delfs, Bloomberg
News: US-China Tensions Make Asian Free-Trade Deal ‘A Priority’, Bhavan Jaipragas and Tashny Sukumaran, South China Morning Post
Report: Trump Reaches for Checkbook Diplomacy to Counter China , Keith Johnson, Foreign Policy
Analysis: The 5 Surprising Things about the New USMCA Trade Agreement, Chad P. Bown,Washington Post
Analysis: The Future of EU International Investment Policy – What Clues to Take From NAFTA 2.0? Robert Basedow, London School of Economics
Opinion: We Could Have Had a Better Deal Than This New and Not Improved NAFTA, Jeffrey Frankel, Market Watch
Opinion: ‘New NAFTA’ is Full of Old Policies that Wreaked Havoc on American Farmers, David Muraskin, The Hill
Analysis: Sticker Shock: Trump’s New Trade Deal Could Bring Higher Car Prices, Megan Cassella and Adam Behsudi, Politico
Chapter: The EU Response to US Trade Tariffs , Maria Demertzis and Gustav Fredriksson, Leibniz Information Centre for Economics
News: Exclusive: EU Set to Clear Start of Talks to Boost U.S. Beef Imports, Philip Blenkinsop, Reuters
FACTOID OF THE WEEK:
Did you know… The average UK-based migrant from Europe contributed approximately £2,300 more to UK public finances in 2016/17 than the average UK adult. In the lead up to Brexit, the UK government asked the Migration Advisory Committee to report on the economic and social impact of migrants in the UK, so they teamed up with Oxford Economics to analyse the fiscal implications. You can read the full report here.
Report: Global Financial Stability Report October 2018, International Monetary Fund
Report: OECD Regions and Cities at a Glance 2018, OECD
IMF Staff Discussion Note: Gender, Technology and the Future of Work, Mariya Brussevich, Era Dabla-Norris, Christine Kamunge, Pooja Karnane, Salam Khalid and Kalpana Kochhar,International Monetary Fund
Analysis: We Need a New, More Co-operative International Order, Tharman Shanmugaratnam, Financial Times
News: World Will Be Poorer and More Dangerous Without Global Economic Cooperation, IMF Chief Economist Says, Greg Robb, Market Watch
News: Guardians of the Global Economy Descend on Bali Divided, Enda Curran and Rich Miller,Bloomberg
Opinion: U.S. Pain Can Be Emerging Markets’ Gain, Shuli Ren, Bloomberg
News: IMF Issues Stark Warning Over Bitcoin and Crypto “Rapid’ Growth, Billy Brambough, Forbes
News: Growth Policies and Populism Threaten Global Economy, IMF Warns, Chris Giles, Financial Times
Analysis:The Global Financial System is Dying in a London Courthouse, Maximilian Hess, Foreign Policy
Analysis: ‘Great Depression’ Ahead, IMF Sounds Dire Warning, William Pesek, Asia Times
WHAT WE ARE READING:
Analysis: SWIFT Action Risks Unintended Consequences, Samantha Sultoon, Atlantic Council
Analysis:How US-China Disputes on Trade, Taiwan and the South China Sea Are Driven by Washington’s New Generation , Douglas H. Paal, South China Morning Post
Analysis:How Europe Can Reform Its Migration Policy, Alexander Betts and Paul Collier, Foreign Affairs
Analysis: IMF: The Fight to Woo a Skeptical US Over Funding, James Politi and Sam Fleming,Financial Times.
Opinion: The Coming North American Digital Trade Zone, Anupam Chander, Council on Foreign Relations
Podcast:The New NAFTA Isn’t Done Yet, Ben White, Politico Money Podcast
October 17: The Evolving Iranian Strategy in Syria: A Looming Conflict, Atlantic Council
October 17: Protecting US Critical Infrastructure, Atlantic Council
Ocotber 18: Championing the Frontlines of Freedom: Erasing the “Grey Zone,” Atlantic Council
November 1: Sanctions Discussion with Former Treasury Secretary Jacob J. Lew, Atlantic Council
November 7: How Iran Will Cope with US Sanctions, Atlantic Council
October 12: Ninth Annual Back-to-School Event: Responses to the Global Refugee Crisis, Council on Foreign Relations
October 23: Global Artificial Intelligence Race, Council on Foreign Relations
November 5-8: DC Fintech Week, Georgetown University's Institute of International Economic Law
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
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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