A resolution to the trade war between the USA and China remained a distant prospect, as new tariffs came into force. The Trump administration announced that tariffs would be imposed on a further $189bn (£145bn) worth of Chinese imports. A rate of 10 per cent will apply starting from September 24, rising to 25 per cent starting January 1 if no deal is struck by then. China retaliated, slapping duties on another $60bn (£46bn) worth of American goods. One Chinese official said that talks would not take place as long as the USA “holds a knife” to China’s neck.
Japan announced that it would enter into trade talks with the USA. The announcement came after Japan had held out on bilateral negotiations with the Trump administration for months in the hopes for the USA to return to the Trans-Pacific Partnership.
Britain faced higher inflation than expected in August, at 2.7 per cent. House prices in London moved in the opposite direction, falling by 0.7 per cent in the year to July, the largest drop since September 2009.
The European Central Bank confirmed plans to slow the programme of quantitative easing from October, by halving monthly bond purchases. Its decision to slow the injection of new money into the money supply reflects its confidence in European labour markets.
The European Commission announced that it was investigating BMW, Daimler and Volkswagen over collusion in the market of emissions-limiting devices. The Commission also announced that it would investigate whether Amazon used data from sales by third-party sellers to decide what products to sell, and at what prices.
Germany’s financial regulator, BaFin, appointed an auditor to monitor Deutsche Bank’s progress in preventing money-laundering. Deutsche Bank was fined last year by regulators from the UK and USA after an investigation into Russian asset-laundering
Oil prices hit a four-year high, as OPEC and Russia decide to maintain current output, in direct defiance of President Trump’s calls to increase production. Prospects for Iranian oil production may also be pushing prices up, as traders consider the consequences of American sanctions on Iran’s oil exports in November.
Protests erupted in more than 70 towns and cities in Iran, spurred by grievances over the economy and dissatisfaction towards President Hassan Rouhani and Ayatollah Ali Kamenei, the supreme leader. The clerical regime organised counter-demonstrations that attracted tens of thousands. At least 20 people have been killed, and many more arrested.
China implemented a ban on all ivory sales and imports of low-grade waste for recycling.
The IMF announced a further $19bn (£14.6bn) bailout package for Argentina. The agreement, pending on the approval of IMF Executive Board, would bring the total amount available under the programme to $57.4bn (£44.1bn) by the end of 2021. Argentina’s recession-laden economy is struggling under steep interest rates and a currency that has lost around 50 per cent of its value against the dollar this year.
The Italian government moves to a more expansionary fiscal stance. “One crisis was enough,” Jean-Claude Juncker, European Commission president, said at an event in Germany. “After the toughest management of the Greece crisis, we have to do everything to avoid a new Greece — this time an Italy — crisis.” There are worries that the preliminary budget figures of Italy will not be compatible with EU rules. Investors responded to the political risk by selling off Italian government debt, sending the ten-year Italian debt yields to its highest level in more than four years.
France has frozen the assets of two Iranian nationals and the country’s intelligence service over alleged links to a foiled attack on an Iranian opposition rally in Villepinte, near Paris. EU countries are in talks over launching a payments channel that would enable European companies to trade with Iran, in an effort to defy US sanctions and keep the nuclear deal alive; after President Trump abandoned it earlier this year.
The new NAFTA deal reached on Sunday by the US, Canada and Mexico was welcomed by all three countries as a major step towards free trade. But the process will not be complete until the agreement is ratified by each countries’ lawmakers, a potentially lengthy process fraught with hurdles, that leaves some uncertainty over the fate of the new pact.
Paris may be set to triumph as Europe’s post-Brexit trading hub, as some of the world’s biggest banks and asset managers steer their EU operations away from London, The Financial Times reports. BlackRock and JPMorgan Chase are poised to join Bank of the USA and Citigroup in preparing for new trading operations in Paris.