Forever Trade War, China’s Worst Case, Europe Inflation: Eco Day

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Good morning Americas. Here’s the latest news and analysis from Bloomberg Economics to help round off your week:

• The trade war between the U.S. and China doesn’t look like it’s heading for a truce anytime soon, casting a shadow over financial markets and the global economic outlook
• China’s economic growth could tumble, debt surge and foreign companies flee in a deepening trade war, economists warn as a week of escalating tensions forces them to ponder worst-case scenarios
• Meanwhile, policy makers will increase stimulus measures in proportion to the impact of higher tariffs from the U.S. in order to keep the economy in a “reasonable range,” the Chinese government said. Beijing separately signaled a lack of interest in resuming trade talks with the U.S.
• Euro-area core inflation was revised higher in April, and is now showing the fastest reading since 2017
  • Meanwhile, European Central Bank officials dragging their feet over a potential revamp of their negative interest rates might be shutting off one way to convince investors they are serious on stoking inflation
• The number of foreigners registered in Poland has more than quintupled in the past five years, easing the tension on a labor market grappling with a record shortage of workers
• Finally: The latest episode of our Stephanomics podcast investigates how rising protectionism, slowing global growth, new technologies and and Germany’s own underinvestment in its infrastructure is threatening the country’s economic model

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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