U.S. Prepares New Tariffs, Williams Warning, U.K. Jobs: Eco Day

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Good morning Americas. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

• The U.S. prepared to hit China with new tariffs even as Donald Trump said he’ll meet Xi Jinping next month. Meanwhile, China is hardening its own rhetoric
  • Economists expect the trade war between the world’s two largest economies to get worse before it gets better -- culminating in a deal by year-end
  • Trump’s tariffs are starting to look like his goal and not a tool for to create leverage in trade talks, Bloomberg’s Shawn Donnan says
• The trade war is having real life consequences for policy makers. U.S. tariffs are already starting to increase inflation and will have a greater impact as they go up, according to Federal Reserve Bank of New York President John Williams
  • Still, options trading suggests there’s appetite for bets on an even more dovish Fed. Here’s a chart of what’s priced in
• The U.K.’s strong labor market continued in the first quarter, as wages rose and the jobless rate hit a 44-year low
  • Still, a new report says Britain risks following the U.S. on declining life expectancy and stagnant wages for the less-educated portion of the population if the causes of inequality go unchecked
• Benoit Coeure is possibly the best-qualified candidate to be the next European Central Bank president, but that may not be enough
  • The European Union’s ex-communist contingent probably weathered a lackluster economic performance by the euro area last quarter
• Finally, another fiscal timebomb is about to go off in Brazil as investors and government officials remain focused on efforts to reform the social security system.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Zoe Schneeweiss

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