January 14, 2020
Trump Trade Deal Raises Issue of Trusting China to Deliver
“After three years of tweets and tariffs, President Donald Trump has arrived at his China moment. The phase-one deal to be signed Wednesday is expected to include China’s commitments to respect American intellectual property and not manipulate its currency. U.S. officials also anticipate $200 billion in new purchases that should help reduce a yawning trade deficit and repair some of the damage suffered by farmers. It hands Trump at least a partial agreement many skeptics doubted was ever possible. In another concession, the Trump administration on Monday reversed an August decision to designate China as a currency manipulator.”
Inflation Surprises in Europe’s East Back Case for Rate Hikes
“Calls for higher interest rates in eastern Europe are getting a boost from inflation. While the European Central Bank is struggling to stoke price growth in the euro area, inflation quickened beyond economists’ expectations in Poland, Romania and the Czech Republic last month. In the latter two countries, price growth is above the upper end of the respective central banks’ target ranges.”
China’s 2019 Exports Edged Up as Total Trade With U.S. Declined
“China’s total exports expanded in 2019 while trade with the U.S. dropped as the trade war hit relations between the two biggest economies. Exports increased 0.5% in 2019 from a year earlier, while imports declined 2.8% in dollar terms, the customs administration said Tuesday. That left the trade surplus at $421.5 billion for the year. Trade with the U.S. declined almost 11% in the year in yuan terms. In December, both import and export growth exceeded expectations, rebounding from a weak month previous. Exports rose 7.6% while imports surged 16.3%.”
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