Big Reads on Economics: Trade War Madness Puts World on Thin Ice
The trade war might not have claimed any recession scalps this week, but growth tensions linger ominously in key pockets of the globe, including China and the U.K.
Here’s a collection of this week’s analysis and enterprise from Bloomberg Economics:
Shawn Donnan and Jenny Leonard explain how U.S. President Donald Trump’s trade war with China morphed from a carefully calibrated strategy into a market-rattling roller coaster as unpredictable as the U.S. president himself. Trump is still centering his presidential campaign on economic growth, and in early states, that’s working in his favor, Misyrlena Egkolfopoulou and Reade Pickert show. Meanwhile, Bryce Baschuk tracks how the U.S. is ready to block the World Trade Organization’s biennial budget to halt its work starting next year.
Germany may have avoided recession, but the vulnerability of global growth to trade conflicts and dependence on U.S. momentum still are on show, according to Craig Stirling. In the U.K., the hobbled state of the economy will be in the spotlight in the lead-up to the Dec. 12 general election, David Goodman reports. And that ballot also means Bank of England policy makers are being forced to keep silent just as the outlook is changing, David explains.
Chinese manufacturing prices in decline since July are helping to damp inflation globally, ratcheting up trade-war tensions as companies worldwide struggle to compete with the discounts, our Beijing reporting team writes. The spiraling effects are grim, even as consumers might enjoy cheaper costs during the Christmas shopping season. China’s trade-war struggles have also reignited the debate over which developing countries in Asia could take the mantle of the world’s workshop. The front-runners? India and Indonesia, according to Chang Shu and Justin Jimenez of Bloomberg Economics.
Fed chief Jerome Powell held to his call that it could be three-and-done for now on interest-rate cuts, even as risks remain to the downside, Craig Torres reports from Washington. That’s buttressing chances that the Fed will defy history in keeping monetary policy steady in a presidential election year, Christopher Condon and Rich Miller show. Meanwhile, Peter Coy explains why Trump sees no contradiction in bragging about the strength of the U.S. economy one moment and asking for lower interest rates the next.
A multi-billion dollar aid package is little relief for American cotton farmers, who had to battle the impact of summer heat on top of U.S.-China tariff battles that are crushing business, Marvin Perez reports. The commodity isn’t getting the attention that soybeans have in the trade war, but the industry is in a rough slump, with cotton futures already down 10% this year.
South African municipalities’ inability to provide consistent power is exacerbating supply disruptions by the debt-stricken state electricity utility. Ana Monteiro investigates how that’s holding back efforts to revive the nation’s economy.
This week, the Stephanomics podcast explores the “Silicon Curtain” being drawn by China in the global technology race, with Carolynn Look reporting from the ground and Bloomberg Chief Economist Tom Orlik joining Stephanie Flanders to discuss what it means for the nation’s economy.
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