A longer US-China trade truce looks likely after an “amazing” meeting between the leaders of both countries. We also bring you the fallout from the Netherlands elections, which saw an unexpected win by a Dutch progressive party, and good news from the Eurozone economy.
‘Amazing’ Trump-Xi meeting
US president Donald Trump has met with Chinese counterpart Xi Jinping this morning, agreeing to lower tariffs on Chinese goods in return for a delay to the introduction of new Chinese controls on rare earth exports.
Trump said in remarks reported by the BBC that the initial truce will last a year:
“Every year, we will review the deal, but I think the deal will go long beyond a year.”
He described his meeting with Xi as “amazing”, while he confirmed plans to cut the 20% portion of tariffs on China for alleged involvement in the fentanyl trade to 10%. “I think you will see some real action taken” on the trade, he said.
China was cooler on the meeting, stating only that it urged the US to follow up on the discussions. It remains to be seen whether the commitments described by Trump will be put formally to paper.
Return of the centrists in the Netherlands
Yesterday’s election in the Netherlands saw the liberal D66 surge to joint-first place, as the far-right Freedom Party (PVV) suffered losses.
With over 99% of the vote counted, the PVV lost 11 seats and is now tied with D66 on 26. Many of its partners in the previous government also fared poorly, with the New Social Contract party being wiped out from the Dutch House of Representatives.
This represents represent a return to the centre for the Netherlands, after having one of its most right-wing governments in history. Presumptive prime minister Rob Jetten, a pro-EU former energy minister, is now set to lead negotiations over the next cabinet.
His three most likely partners are the centre-right Christian Democrat Alliance, the Labour-Green alliance and the liberal-conservative Party for Freedom and Democracy. If confirmed, Jetten would both be the youngest ever Dutch leader as well as its first openly-gay PM.
We reviewed the possible implications of the poll in a Trade Insights feature earlier this week, which you can read here.
Eurozone economy
GDP across the whole of the Eurozone showed unexpected growth in the third quarter of this year.
Dutch bank ING said that newly released data showed that European GDP grew by 0.2%, beating previous expectations of more modest growth.
The growth was uneven in many places. While the German and Italian economies stagnated, Dutch and French GDP defied expectations. French GDP, in particular, rose by 0.5%.
Charlotte de Montpellier, a senior economist at ING, said that the “macroeconomic fallout” from the ongoing French political crisis remained “limited”.
“That said, several warning signs persist. Global demand is slowing. Household savings intentions have hit record highs, making a drop in the savings rate unlikely. Business confidence gains are concentrated in a few sectors, notably aerospace. And with budget talks dragging on in parliament, there’s no clarity on next year’s tax treatment for firms and households.”
What else is in the news
- The Joint Customs Consultative Committee (JCCC) has released an update in relation to Import Control System 2 (ICS2)
- Canada’s chief negotiator, Ambassador Kirsten Hillman, told a Canadian Senate committee that the “contours” of a trade agreement between the US and Canada were being discussed before negotiations were halted
- The FT reports that the US has quietly paid US$25m in overdue membership fees to the World Trade Organization (WTO), despite Trump’s publicly aggressive stance towards the body
Yesterday in trade
- The WTO warned that Brexit was continuing to hit UK trade, as the UK’s departure from the EU had “led to a permanent increase in trade costs for UK businesses”
- The EU floated a date of 20 December for the signing of a trade deal with Mercosur
- The Department for Environment, Food & Rural Affairs warned that Sevington Border Control Post was experiencing delays in processing plan health inspections
You can read it all here.
