Mexico’s Tariff Hit, Italy’s Latest Debt Fight and MMT: Eco Day

(Bloomberg) -- Go inside the global economy with Stephanie Flanders in her new podcast, Stephanomics. Subscribe via Pocket Cast or iTunes.

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

• Trade tensions stayed right at the top of the agenda after President Donald Trump vowed to impose a 5% tariff on Mexican goods until that country stops immigrants from entering the U.S. illegally
  • Trump’s Mexico threat could cause massive economic disruption ahead of the 2020 elections and doom his signature renegotiation of a North American trade deal
  • Economists warned the action also is a new danger to the world economy. Stocks fell and German bund yields dropped to a new sub-zero record low
• Italian yields are going the other direction as that country braces for another fight with the EU over its finances. The government may use a recent Gucci tax settlement in its plea to Brussels, but central bank boss Ignazio Visco said the debt level is a severe constraint on the economy and Italy needs a “credible” fiscal strategy
• Is Modern Monetary Theory the solution? It may be controversial, but a 600-page MMT textbook sold out of its initial print run
• Concerns about the global economy were compounded by the latest figures out of China showing manufacturing manufacturing slowing more than expected
• It’s Peter Praet’s last day as European Central Bank chief economist, bringing to an end the tenure of one of the masterminds of the massive monetary stimulus in the euro area. The ECB’s next policy meeting is June 6
• Finally, here’s our weekly wrap of what happened in the world economy and the lessons learned

To contact the reporter on this story: Fergal O'Brien in Zurich at fobrien@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net, Zoe Schneeweiss

©2019 Bloomberg L.P.