Trade war rhetoric between the US and China continued to gain momentum last week with a noticeable shift in the Yuan; the currency moved by over 1.1% in a 24-hour period against the US dollar causing the Peoples Bank of China (PBoC) to release a statement. PBoC’s Head of Financial Research was quick to defend the currencies movement stating that the shift should not be taken as guidance of the central bank’s intentions and that the move was reflective of a change in market expectations based on the rise of external uncertainties. In a formal statement to the press the PBoC confirmed their position regarding trade wars and currency, “China upholds multilateralism, globalisation, free trade and rule-based international guidelines, and will not make the yuan’s exchange rate a tool to cope with trade conflicts”.
It was Independence Day in the US on Wednesday calling a welcome half time on trade war discussions. Unsurprisingly, Trump was quick to reignite discussions following the national holiday and wasted no time on imposing tariffs of $34bn on Chinese goods on Friday of last week. China responded swiftly to Trump’s attack imposing tariffs of their own, only to be countered by Trump with a threat of a further $500bn in trade tariffs; which equates to all the goods that the US imports from China. In a move, which can only be described as leftfield, China are seeking an ally in the EU to form a united front against Trump and his escalating trade policies. China has offered preferential treatment to the EU and acceleration of investment negotiations; the latter of which would be particularly favourable. In a most unlikely union, the two could form a coalition against the US.
Fresh from their win against Colombia last Tuesday, where Harry Kane ably scored a penalty in the 57th minute for England, the young team proved that they can win on penalties and proceeded to the quarter-final against old rivals Sweden. The nail-biting match between England and Sweden took place on Saturday and buoyed by their win against Colombia, England defeated Sweden 2-0 with all to play for in the semi-finals against Croatia.
While England is consolidating their position in the World Cup, the same cannot be said of the UK’s position on the world stage, arguably we may have scored an own goal. Yesterday at midnight, David Davis, Brexit secretary, resigned citing he did not want to be a ‘reluctant conscript’. Davis has long been opposed to Theresa May’s soft Brexit position and was critical of the ‘progressive dilution’ of the government’s strategy. Critics of the UK government were quick to react to this news which will have undoubtedly cast aspersions on May’s credibility.
