There is heightened concern around the world this week, again, regarding a global trade war and the potential impact it could have on economic growth. The net effect of Trump’s policies, should they last, and the universal retaliation will be negative, with no real winners.
Global News
- The trade war has continued to brew over the last couple of weeks. Analysts have become concerned with what it will mean for global economic growth and have risen the red flag of a possible recession.
- Emerging Markets have been impacted the most acutely as trade war threats encouraged risk aversion causing capital flight to safety, and so strengthening the US dollar.
- The Turkish lira had a short-lived victory lap after President Erdogan’s re-election, it was interrupted as emerging markets pulled back due to trade war rhetoric.
- The Supreme Court in America has upheld Trump’s travel ban against people from seven, mostly Muslim, countries. This has been met with broad backlash.
- Special Counsel Robert Mueller may reach the end of his investigation into Russian collusion in Trump’s Presidential campaign by September this year.
- Harley-Davidson has met Trump’s wrath – Trump accused the motorbike company of using new tariffs as a cover for an existing plan to move production abroad and threatened them with an unspecified “big tax” on bikes imported to the US.
- Germany is set to raise the minimum wage by 4%. This above-inflation increase is part of an objective to get minimum wage to €9.35 by 2020.
- European Union leaders have gathered in Brussels for a two-day summit. Among challenges to be discussed (immigration and trade wars) are the details of Britain’s exit. Theresa May will most likely be targeted for the lack of information regarding Britain’s split that is to take place in nine months.
Local news
- Ex SARS boss Tom Moyane is in the not so flattering spotlight. It has been revealed that SARS lost R142 billion under his leadership. Follow this link to an article providing the horrid details.
- Employment gains of 56 000 jobs, in the first quarter of this year, are unlikely to be sustained. Business confidence remains weak as policy reforms are slow and marginal, this means that this growth in employment is unsustainable.
- Mercedes Benz has announced that it will be investing R9.5bn to expand its facilities in South Africa to produce the next generation C-class.
- Finance Minister Nhlanhla Nene has said that restructuring Eskom is a top priority.
