Threatening a popular former vice-president on social media, going toe-to-toe with the second largest economy in the world over trade and a weekly staff change – yesterday should have been atypical for the President of the US, but in the age of the Trump White House, barely raises an eyebrow.
The president announced that his administration would impose 25% tariffs on up to $60bn on imports from China, likely targeting those key strategic sectors identified by Beijing in its “Made in China 2025” plan. Trump said this intervention to tackle the US $375bn trade deficit with China was overdue and would make the country “a much stronger, richer nation”.
We will get more detail on the products that will be subjected to the tariffs over the next two weeks, although early predictions suggest robotics, medical products and electric vehicles will be included.
We can also expect over the coming days to see what shape China’s retaliation will take, with Boeing aircraft and US soya beans likely targets. Retribution towards US soya bean farmers poses a political risk to Trump as well as financial, given they are concentrated in states that backed him in the 2016 election.
Later in the day, the president replaced his national security adviser HR McMaster with a hawkish former diplomat who recently argued in favour of military action against both North Korea and Iran.
John Bolton, a former ambassador to the UN under George W Bush, becomes the third person to hold the job in just over a year. According to The Times, he was considered for a role in Trump’s original cabinet but the president decided against him because he was not a fan of his bushy moustache.
As I say, only in the Trump White House.
EU leaders have backed Theresa May and blamed Russia for the nerve agent attack in Salisbury. In a joint statement at a summit in Brussels, they said there was “no plausible alternative explanation”. The EU ambassador to Moscow has been recalled.
Protests have taken place in Sacramento, California sparked by the killing of an unarmed black man by police. Stephon Clark, 22, was shot about 20 times in the backyard of his grandparent's home after officials thought he had a gun, but none was found at the scene - only a mobile phone.
Business & Economy
Senior business leaders have told The Times that they expect thousands of jobs in the City will transfer continental Europe from next month. This is despite Theresa May securing a transition deal that effectively sees the UK aligned with Brussels until the end of 2020. One senior figure predicted that between 5,000 and 10,000 finance and support staff would move by the end of 2018. (£)
Homeowners have been told to brace themselves for higher interest rates after the Bank of England signalled that they are likely to raise rates in May. The Monetary Policy Committee voted yesterday to keep rates the same but markets are predicting an rate rise in May, followed by a further increase next March, that will bring rates back to 1% by this time next year. (£)
Aviva is preparing to scrap its plans to cancel £450m of high-yielding preference shares after there was a backlash from City and retail investors. The company planned to cancel preference shares on March 8 as part of a plan to return £500m to ordinary shareholders but will now reverse the proposal after being surprised at the scale of the criticism.
What happened yesterday?
It was a bad day for yesterday for US and European stocks yesterday as both suffered sharp losses following Donald Trump’s announcement that trade tariffs were to be imposed on imports from China. In New York, the S&P 500 fell to its lowest intraday level since the start of March, and the Xetra Dax index in Frankfurt experienced a loss of 1.7%, an unsurprising trend given the export-heavy nature of the market. The FTSE 100 also fell, down 1.2% at the close of trading.
The slide in the equity market caused a rise in government bonds as investors continue to decipher the latest policy activity from the Federal Reserve.
On the currency markets, Sterling retreated from a seven-week high to stand 0.2% lower at $1.4111. Against the euro it remained flat on the day a €1.1460, having been at its highest point against the euro since June last year earlier in the day. Focus turns to a possible interest rate rise in May after the Bank of England’s Monetary Policy Committee voted 7-2 in favour of keeping rates at the current level.
John Laing Infrastructure Fund Ltd
UK Economic Announcements
(15:00) New Homes Sales (US)
Intl. Economic Announcements
(12:30) Durable Goods Orders (US)
Columns of Note
Isabel Hardman bravely enters the heated debate over the blue passport in The Spectator, arguing that both Remainers and Brexiteers are misunderstanding the issue. Hardman says those who backed remaining in the EU are wrongly depicting Brexit result as being about protectionism and Britain no longer striking trade deals with its EU partners, and Leavers angry at the fact a French company could manufacture the new passports are out of step with the vision of a truly global Britain that has been promised after Brexit.
InThe Times today, Philip Collins writes that there is a “wall of vanity” preventing Labour and the Liberal Democrats from uniting, despite the fact they share a common history and ideology. He says the prospect remains “the hope and fantasy of progressive liberals and social democrats for ever and a day” but the wall between them remains high and few have attempted to scale them. (£)
Did you know?
Known as the “Rain of Fish,” once or twice a year, during a massive rain storm, hundreds of small silver fish supposedly rain from the sky onto the streets of the small town of Yoro in Honduras. The simplest explanation for these animal rains is that large rainstorms force certain animals out of their homes or flood rivers, causing them to fill the streets, or that a flash flood can deposit fish far from their waters before quickly drying up, leaving spectators to believe that the animals must have come down with the rain.
House of Commons
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House of Lords
House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL] - Committee stage - Lord Grocott
House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL] - Committee stage - motion to regret - Lord Trefgarne
Conscientious Objection (Medical Activities) Bill [HL] – Committee stage - Baroness O'Loan
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