Trump Warns Beijing, China's Slowdown, Fed Needs Draghi: Eco Day

(Bloomberg) -- Welcome to Thursday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

• President Donald Trump said substantial additional U.S. tariffs would be placed on China if there’s no progress on a trade deal after his planned meeting with Xi Jinping at the G-20 Summit in Japan. The summit could save the world $1.2 trillion, writes Simon Kennedy. Meantime, the contours of a truce are emerging ahead of the faceoff
• China’s economy continued to weaken in June, with the slowdown underscoring how important it will be for Xi to push forward talks with Trump and avoid tariffs on remaining exports to the U.S.
• Trump said the U.S. should have Mario Draghi, head of the ECB, running its monetary policy -- “instead of our Fed person” -- and reiterated he has the right to demote or fire Jerome Powell. Here’s a summary of recent remarks by Fed policy makers
• The U.S.-China trade war is compounding a major challenge facing South Korea: a structural decline in capital expenditure that threatens to reduce potential growth, writes Justin Jimenez
• Ballooning U.S. budget deficits will push public debt to new highs, as this chart shows. In contrast, Germany is sticking to balanced budgets and ambitious debt targets despite slower revenue growth, creating an ever-larger fiscal cushion
• India’s economy showed signs of fragility in May after April’s uptick, suggesting a sustained recovery needs a fiscal stimulus from newly re-elected Prime Minister Narendra Modi’s government
• Andrew Bailey should be the perfect candidate to lead the BOE. But some of the very qualities that have marked him as a frontrunner to replace Mark Carney as governor may trip him up
• United Nations members urged the U.S. and Iran to step back from the brink of war and prevent an escalation of tensions

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Paul Jackson

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