Closing summary
Time for a recap.
World leaders have gathered in Osaka, Japan, ahead of a likely storm G20 meeting dominated by trade disputes.
Donald Trump, Xi Jinping, Shinzo Abe, Theresa May, Justin Trudeau, Recep Tayyip Erdoğan, Giuseppe Conte and Pedro Sánchez, and more, have braved the wet and windy airfield at Osaka, for a crunch summit.
Trump set the tone for the G20, via Twitter, by demanding that India withdraw new tariffs on US goods --- even though they were imposed in response to his own tariffs on India.
I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further. This is unacceptable and the Tariffs must be withdrawn!
— Donald J. Trump (@realDonaldTrump) June 27, 2019
Trump has also warned he could impose tariffs on all Chinese imports - an extra $325bn or so - if he isn’t satisfied with Beijing’s actions on trade. His economic advisor, Larry Kudlow, has echoed that claim today.
He’s also cast doubt on America’s commitment to defending Japan -- causing another pillar in the world order to wobble slightly....
Financial markets will be watching the G20 meeting closely, hoping for progress in the trade disputes that have slowed global growth in recent months.
China has reportedly drawn up a list of conditions to present the US, when Trump and Xi dine on Saturday night. They include ending the blacklisting of Huawei.
Trump is also due to meet Vladimir Putin and Recep Tayyip Erdoğan during a busy schedule. The meeting with Erdoğan is likely to be particularly fiery, given US concerns that Turkey is buying an anti-aircraft system from Russia.
The climate emergency will also be on the agenda. May has told us that she’ll be raising the issue with other world leaders, having recognised the impact of climate change.
The G20 begins Friday morning Osaka time, or around midnight in the UK / early evening on the East Coast, so stay tuned to our website for more news. GW
Investors around the globe are trying to square the White House’s ‘good-cop’/’bad-cop’ commentary on the trade war with China, says analyst Ken Odeluga of City Index.
Trump’s “Plan B” is to “take in billions and billions of dollars a month” more from China while doing “less and less business” with the second-largest economy. His Treasury Secretary Steven Mnuchin remained “hopeful” on Wednesday.
Other Washington hawks bat away Beijing’s insistence on a ‘balanced’ deal. Little wonder that ample dissonance accompanies the wide expectation that a tariff ceasefire will be agreed this weekend.
European stock markets have closed after a day of subdued trading.
The Stoxx 600 index, which covers Europe’s biggest companies, ended the day basically unchanged. Investors are hunkering down ahead of the formal start of the G20 summit on Friday.
Healthcare and some consumer goods makers rallied, matching gains in America. That’s because only two Democratic challengers to become the next US president backed the idea of replacing private health insurance with “Medicare for All”.
Wall Street is feeling pretty good that only Elizabeth Warren and Bill De Blasio said they'd eliminate private health insurance in favor of a government-run plan https://t.co/aPLhfVOHeN pic.twitter.com/8dOzdyRfmJ
— Anna Edney (@annaedney) June 27, 2019
Heads-up: One of Donald Trump’s top advisors has warned that America could press on and raise tariffs on Chinese imports.
Larry Kudlow, director of the National Economic Council, has said America is insisting on ‘structural changes’ to China’s intellectual property laws, with effective enforcement for any breaches.
He told Fox News:
“If need be, we may move ahead – we may move ahead on additional tariffs.
However, Kudlow also claimed America hasn’t set any ‘preconditions’ ahead of the Trump-Xi meeting on Saturday.
We have word from the WH --> Kudlow says there are no preconditions set ahead of any trade talks with China. (per @Reuters, Fox News)
— Jessica Smith (@JessicaASmith8) June 27, 2019
This G20 summit is Theresa May’s last big foreign trip before stepping down as PM.
She’s expected to hold meeting with Australian PM Scott Morrison, Turkey’s Recep Tayyip Erdoğan, South Africa’s Cyril Ramaphosa and Saudi crown prince Mohammed bin Salman.
Lots to discuss with that group! May’s spokeswoman says she will raise the death of Jamal Khashoggi with MBS, and also press him on the need to de-escalate tensions with Iran.
The UK court ruling that Britain’s arms sales to Saudi Arabia are unlawful will probably also come up.
Quite the lineup for Theresa May's one-to-one meetings at this G20 summit in Osaka - Putin, Mohammad bin Salman, Erdogan...And Trump will be here too, of course. So much for that "rules-based global order" she prizes.
— Heather Stewart (@GuardianHeather) June 27, 2019
More photos ahead of the G20
The leaders of China and Japan, Xi Jinping and Shinzo Abe, have held a meeting in Osaka ahead of the G20 meeting.
Although the handshake doesn’t look too chummy, there are signs that relations may be warming.
Abe told Xi that he hopes to welcome him to Japan soon:
Around the time of the cherry blossoms next spring, I would like to welcome President Xi as a state guest to Japan, and hope to further elevate ties between Japan and China to the next level.
In another hotel suite, Ivanka Trump and husband Jared Kushner appeared to enjoy dinner with Australian PM Scott Morrison:
During the dinner, president Trump congratulated Scott Morrison on his “tremendous victory” at the Australian federal election.
Trump declared he’d expected it all along....
“He didn’t surprise me but he surprised a lot of other people.
“See, I knew him. See, I said you’re going to do very well, and he did, he did that.
“They called it an upset but I don’t call it an upset ... I want to congratulate you very much, it was a fantastic thing.”
Morrison’s critics don’t share Trump’s enthusiasm, I fear, after the Australian PM announced plans to cut regulations - on top of planned tax cuts. All very Trumpian....
World leaders have continued to arrive in Osaka - including the heads of Italy and Spain.
Ellesmere Port wins Astra deal...IF Brexit goes smoothly
Big news in the UK car sector -- Vauxhall’s Ellesmere Port plant in the North West of England has won the chance to manufacture its new Astra vehicle.
That’s a big win for the plant, which employs 1,100 people, and has beaten off competition from a rival plant in Gliwice, Poland.
BUT there’s a catch... the plan is conditional on the terms of Britain’s exit from the European Union. That suggests that a no-deal Brexit would scupper the plan.
Vauxhall’s owner, PSA, says:
The decision on the allocation to the Ellesmere Port plant will be conditional on the final terms of the UK’s exit from the European Union and the acceptance of the New Vehicle Agreement, which has been negotiated with the Unite Trade Union.
PSA has also decided to manufacture the new Astra at its factory in Russelsheim, Germany.
Motoring journalist Richard Aucock says it’s a real boost for the UK auto industry.
Wow - IF UK strikes a strong post-#Brexit deal, Ellesmere Port WILL make the next-generation Vauxhall Astra. Over to you, HM Gov...
— Richard Aucock (@richardaucock) June 27, 2019
It's potentially a massive, massive win for UK automotive, as Ellesmere Port will be winning ahead of Gliwice in Poland. Russelsheim, Germany will also make the next-gen model. Don't let it slip, @BorisJohnson.
— Richard Aucock (@richardaucock) June 27, 2019
Donald Trump is due to hold meetings with a series of world leaders at the G20 summit -- including several fellow ‘strong men’.
Top of the list is president Xi Jinping. If the WSJ is right, Xi will urge Trump to accept China’s proposals to pause the trade war and resume talks. The success, or otherwise, of those talks will swiftly move the financial markets.
Trump will also speak with Vladimir Putin - the first face-to-face meeting since the Mueller investigation into Russian interference in the 2016 election concluded.
He’s also due to have a “working breakfast” Saturday with Saudi Crown Prince Mohammed bin Salman - where rising tensions with Iran will surely be discussed.
The age of the alpha males is definitely not over. Trump’s meetings at the G20 starting Friday afternoon: Putin, Bolsonaro, MbS, Xi Jinping, Erdogan
— Susan Glasser (@sbg1) June 27, 2019
Updated
It’s just been confirmed that America’s economy grew at a steady pace in the first quarter of 2019.
US GDP expanded at an annualised rate of 3.1% in January-March, says the commerce department in its latest assessment, matching earlier readings.
*U.S. 1Q GDP GREW AT UNREVISED 3.1% PACE; EST. 3.2%
— lemasabachthani (@lemasabachthani) June 27, 2019
The figures show that trade made a positive contribution to growth, with exports up 5.4% and imports down 1.9%. That should please the White House, and may show that president Trump’s trade war is having an impact - forcing US consumers and businesses to buy less from abroad.
However, the report also shows that consumer spending slowed, rising by just 0.9% in the quarter. Spending on durable items, such as cars and computers, declined by 2.4%.
Businesses expanded their inventories, boosting growth, while investment by companies also rose.
Updated
Donald Trump is also due to meet Turkish president Recep Tayyip Erdoğan at the G20.
That could be a challenging meeting, as the US is preparing sanctions on Turkey if it goes ahead with the purchase of a Russian anti-aircraft missile system.
Kim Catechis, portfolio manager at Legg Mason affiliate Martin Currie, predicts fireworks:
“Whilst Turkey is facing some serious fundamental challenges, geopolitical events are complicating matters further. Ankara and Washington are on a collision course over the imminent deployment of Russian missiles and its support for Iran, Russia and Qatar versus the US- supported Saudi Arabia and Israel.
“Trump and Erdogan are meeting at the G20 in Japan this weekend. We expect this meeting to be fiery and believe it will result in sanctions, knocking investor confidence even further.”
Donald Trump has been whisked from the airport to dinner, with Australia’s prime minister Scott Morrison (fresh from his re-election).
On the US side of the table is US treasury secretary Steven Mnuchin, national security advisor John Bolton and trade representative Robert Lighthizer, along with White House advisors Jared Kushner and Ivanka Trump.
Morrison is accompanied by finance minister Mathias Cormann, trade minister Simon Birmingham and Australia’s Washington ambassador Joe Hockey.
Morrison is expected to urge Trump to end the trade war with China. Yesterday he vowed that Australia wouldn’t be a “passive bystander”, saying:
“The impact of any further deterioration of the relationship will not be limited to these two major powers.
The balance between strategic engagement and strategic competition in the US-China relationship has shifted. This was inevitable.”
Updated
Despite the UN finding “credible evidence” that Saudi Arabia is responsible for the killing of journalist Jamal Khashoggi last year, crown prince Mohammed bin Salman is still welcome at the G20 meeting.
MBS has landed at Osaka, where he’s expected to meet with Donald Trump on Saturday.
European stock markets have dropped into the red, as investors worry that Donald Trump will not accept China’s reported demands to end the trade war.
The EU-wide Stoxx 600 is now down 0.2%, with losses in London, Paris and Amsterdam (all down around 0.4%).
Updated
WSJ: China to present Trade War truce terms to Trump
Significant news on the trade war: China is planning to present Donald Trump with the proposed terms of a settlement to end their trade war.
That’s according to the Wall Street Journal, which is reporting that Beijing has drawn up several conditions, including
- Removing its blacklist on Huawai, which bans US firms from selling technology to the Chinese firm
- Removing all the tariffs recently imposed on Chinese imports into America
- Dropping efforts to force China to buy more US goods.
These are quite significant demands -- it’s not clear that Trump would accept them, unless China is also making major concessions on, say, forced technology transfers and access to its economy.
The WSJ says:
The U.S. chief trade negotiator, Robert Lighthizer, and his Chinese counterpart, Liu He, talked by telephone this week on ways to get the talks back on track and expect to meet in person in advance of the presidents’ Saturday lunch meeting after a Group of 20 summit in Osaka, said people familiar with the discussions. It is far from clear what the two will manage—and whether their bosses will approve their work.
Despite his preconditions, Mr. Xi isn’t expected to take a confrontational tone with Mr. Trump, according to the Chinese officials. Rather, they say, he will sketch out what he envisions as an optimal bilateral relationship, which includes China’s help on security issues vexing to the U.S., especially Iran and North Korea.
China’s Xi to present Trump with a set of terms for settling the trade fight, including lifting a ban on sales to Huawei https://t.co/6GpBuV6DlZ via @WSJ
— Jesse Johnson (@jljzen) June 27, 2019
Updated
President Trump arrives for G20
Air Force One has touched down in Osaka, bringing Donald Trump and his entourage to the G20 meeting.
The President has just left the plane, walked down the steps clutching an umbrella (luckily for him, the wind has died down a little). His daughter Ivanka was close behind.
They’re now in an armoured car (the famous high-tech “Beast”, I think), leaving the airport.
With the help of an umbrella, Pres Trump steps off Air Force One. Surprised there's no G20 logo on it. Greeted by US and Japanese officials on the tarmac. pic.twitter.com/2mkMs7pOOy
— Mark Knoller (@markknoller) June 27, 2019
U.S. Secretary of State Mike Pompeo has been spotted in Osaka, having stopped off in India for meetings on his way to the G20 summit.
Pompeo seemed to enjoy his trip to New Delhi, declaring that the partnership between the US and India is “already beginning to reach new heights” -- ironically, just before Trump’s tweet threatened to undermine it.
As Pompeo put it yesterday:
Great friends are bound to have disagreements. The United States has been clear we seek greater market access and the removal of trade barriers in our economic relationship.
And today, I address these differences in the spirit of friendship and I think that the two of us will be able to see a good outcome for each of our two countries,”
The stormy weather at Osaka airport may, alas, match the mood inside the G20 summit over the next few days.
Donald Trump has now picked fights with three major international rivals:
- Telling India to reverse its new tariffs on some US imports
- Threatening more tariffs on China, while claiming its economy is going down the tubes
- Criticising America’s pledge to defend Japan, claiming it is one-sided as Japan “doesn’t have to help us at all” and “can watch it on the Sony television.”
The AFP newswire sets the scene....
US President Donald Trump set the tone Thursday for what promises to be a stormy G20 summit by lashing out at friends and foes alike over trade tariffs and foreign policy.
The long-running US-China trade war looked set to dominate the two-day meeting of world leaders in Osaka from Friday but clashes also loomed over climate and a series of hotspots ranging from North Korea to Iran.
On board Air Force One en route to Japan, Trump fired off a characteristically bullish tweet, chiding long-standing ally India for “unacceptable” tariffs on American goods.
#UPDATE US President Donald Trump has set the tone for what promises to be a stormy #G20 summit by lashing out at friends and foes alike over trade tariffs and foreign policy. https://t.co/hXr1sAlmKy #G20Osaka #USChinaTradeWar pic.twitter.com/EQ6FSQvqg0
— AFP news agency (@AFP) June 27, 2019
The first casualty of the G20 meeting appears to be umbrellas, as the Osaka weather strikes.
This appears to be Sky’s diplomatic editor, Dominic Waghorn, getting off Theresa May’s plane. Hopefully he can put any damage on expenses....
Updated
Donald Trump raised the heat ahead of his meeting with president Xi, by claiming that China’s economy was “going down the tubes”.
But is he right, or is this just White House hyperbole?
My colleague Martin Farrer has dug into the data, and explains all here:
Anyone attending the G20 meeting needs to have packed their best warm, waterproof clothes.
World leaders arriving at Kansai airport in Izumisano city, Osaka, are getting a wet and windy reception - umbrellas and coats are certainly required.
A friendship characterised by warmth and the promise of a bright future.
— PMO India (@PMOIndia) June 27, 2019
Prime Ministers @narendramodi and @AbeShinzo hold talks in Osaka, the first such meeting between these leaders since the start of Japan’s Reiwa era.
Many aspects of India-Japan relations were discussed. pic.twitter.com/59CiuBHZWA
World leaders arrive for G20
Over in Osaka, world leaders have been arriving ahead of the G20 summit (which runs from Friday to Saturday).
India’s leader, Narendra Modi, has already met with Japan’s Shinzo Abe -- I wonder if Trump’s tweet came up....
Government spokesman Raveesh Kumar has said the pair discussed “a broad range of topics of mutual interest”, after enjoying a warm handshake and hug.
Greeting each other as best friends do!
— Raveesh Kumar (@MEAIndia) June 27, 2019
Japanese PM @AbeShinzo warmly welcomes PM @narendramodi ahead of their bilateral meeting. #G20OsakaSummit pic.twitter.com/7SwlmxCMUq
European stock markets have also risen this morning, boosted by hopes of a US-China trade ceasefire.
The Europe-wide Stoxx 600 index is up 0.2%, lifted by gains in Italy and Germany.
Russ Mould, investment director at AJ Bell, says the G20 summit in Osaka is crucial for market prospects this summer:
This weekend is extremely important for the future direction of global stock markets. The G20 summit will include trade talks between the US and China and investors will be looking for any sign that the two countries can sort out their differences.
It’s worth reiterating that India only hiked tariffs on US goods in retaliation for America imposing new tariffs on its steel and aluminium exports.
Narendra Modi’s government had sought an exemption to those tariffs (which Donald Trump imposed as part of his plan to support American steelmakers).
But when they were rebuffed, India import tariffs on more than 20 items from the US — including almonds, apples, walnuts, chickpeas and phosphoric acid.
Bloomberg’s Shawn Donnan suggests Trump should have mentioned this....
Missing from this tweet: India’s latest salvo was in response to US decision to raise its own duties on Indian goods... https://t.co/6Yq53PmfPO
— Shawn Donnan (@sdonnan) June 27, 2019
Updated
India’s stock market is taking Trump’s trade tweet in its stride.
The SENSEX index has gained 168 points to 39,760, a rise of 0.44% - taking it close to this month’s record high.
But investors will be watching events in Osaka, Japan closely over the next few days as it hosts the G20.
Saurabh Jain of SMC Global Securities explains:
“Markets are jittery due to the uncertainty coming from the trade tiffs between U.S. and China and markets will continue to be cautious till the conclusion from the G20 meeting comes out.
Updated
Reports: US and China agree trade war truce.
Intriguingly, the South China Morning Post is reporting that Washington and Beijing have “tentatively agreed” a trade war truce.
This ceasefire (if confirmed), would give them a window of opportunity to resume negotiations to end the trade war.
The SCMP says:
Details of the agreement are being laid out in press releases in advance of the meeting between Chinese President Xi Jinping and US President Donald Trump at the Group of 20 leaders summit in Osaka, Japan, this weekend, according to three sources – one in Beijing and two in Washington.
Such an agreement would avert the next round of tariffs on an additional US$300 billion of Chinese imports, which if applied would extend punitive tariffs to virtually all the country’s shipments to the United States.
#Breaking: Trade war: US and China agree tentative truce before #G20 summit https://t.co/L7iBbmCBkQ
— SCMP News (@SCMPNews) June 27, 2019
Stock markets are rising today, on hopes of trade war progress at the G20 meeting.
China’s CSI 300 index has risen by 1%, while Japan’s Nikkei gained 1.2%.
The rally comes after US treasury secretary Stephen Mnuchin claimed that the US and China were 90% of the way towards a trade deal.
Donald Trump’s tweet about India’s tariffs has set the tone for the G20 summit, taking place on Friday and Saturday.
Trump fighting on all fronts at the G20 https://t.co/HOmF1xcmoi
— Joshua Mahony (@JMahony_IG) June 27, 2019
The Indian government isn’t accepting Trump’s criticism, reports Reuters:
India’s tariffs are not that high compared to other developing countries, Indian government sources told Reuters on Thursday, reacting to United States President Donald Trump’s call to withdraw what he said were very high tariffs.
Earlier Trump tweeted that he looked forward to meeting Indian Prime Minister Narendra Modi at the G20 summit in Japan, but said that for years India had put “very high tariffs against the United States”. Adding: “This is unacceptable and the tariffs must be withdrawn!”
This month, India slapped higher tariffs on 28 U.S. products in retaliation for Washington’s withdrawal this month of tariff-free trade for certain Indian goods.
India’s tariffs are in line with the World Trade Organization rules, the government sources said, adding that U.S. tariffs on some items were much higher than India’s.
Indian government sources refute Trump claim that its tariffs are very high (Reuters) https://t.co/GAFIloWW5K
— Choonsik Yoo (유춘식) (@choonsikyoo) June 27, 2019
Trump hits out at India's Modi over tariffs
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The threat of a global trade war is looming over the markets today, as world leaders prepare for a crunch meeting in Japan.
Donald Trump has raised the stakes ahead of the G20 summit, threatening his Indian counterpart Narendra Modi. Although Trump proudly claims to be a “tariff man”, he doesn’t like it when other people play the same trick.
Trump is unhappy that India has just imposed tariffs on 28 US products, including almonds and apples. The new duties, some as high as 70%, are a tit-for-tat retaliation for America’s refusal to exempt Delhi from higher taxes on steel and aluminium imports.
So, in a tweet blasted off en-route to the G20 meeting in Osaka, Trump has announced he’ll have a stern word with Modi over the issue - demanding these tariffs are removed.
I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further. This is unacceptable and the Tariffs must be withdrawn!
— Donald J. Trump (@realDonaldTrump) June 27, 2019
Just stopped in Alaska and said hello to our GREAT troops! pic.twitter.com/oLYn1mpaVm
— Donald J. Trump (@realDonaldTrump) June 27, 2019
Trump already had China and Vietnam in his spotlight. Yesterday, he declared that he was quite prepared to impose tariffs on all Chinese goods (currently more than $300bn has been spared so far).
He told Fox Business Network.
“China’s economy is going down the tubes – they want to make a deal.....
“You have another $325bn that I haven’t taxed yet – it’s ripe for taxing, for putting tariffs on.”
Trump also threatened to drag Vietnam into his trade war, expressing unhappiness that some firms are dodging the tariffs on Chinese goods:
“A lot of companies are moving to Vietnam, but Vietnam takes advantage of us even worse than China. So there’s a very interesting situation going on there.”
Investors have been crossing their fingers, hoping that Trump would agree a ceasefire with China during the G20 meeting - he’s due to meet president Xi on Saturday. There has been chatter that the US could suspend any further tariffs while a deal is stuck - although Trump’s comments on Fox don’t really bear that out....
Also coming up today, we get a new eurozone economic confidence report, and updated US growth figures for the January-March quarter.
The agenda
- 10am BST: Eurozone economic confidence figures for June
- 1pm BST: German inflation data for June
- 1.30pm BST: US GDP for Q1 2019 (third estimate).
Updated
