US-China trade tensions intensify, NHS turns 70
China meeting with 16 European states in Bulgaria, a big week of economic data in the US and the UK’s National Health Service celebrating 70 years
Produced by Daniel Garrahan, Filmed and edited by Petros Gioumpasis
US-China trade tensions intensify. China Meets with 16 European states in Bulgaria. It's a big week of economic data in the US. And the UK's National Health Service celebrates its 70th birthday. These are just some of the big stories the Financial Times will be watching in the week ahead.
First, to the next battle in the US-China trade wars. On Friday, the US is due to start charging a 25% tariff on imports of 818 different types of products from China. That's trade worth some $34 billion last year. Beijing is about to do the same in return. And neither side is showing any sign it's ready to stand down. Economists in financial markets are increasingly nervous about an escalating tit for tat tariff war between the world's two biggest economies. And the US is already planning to target a further $16 billion in Chinese imports. Donald Trump, who has taken umbrage at Beijing's plans to retaliate, has threatened tariffs on a further $200 billion in Chinese imports if China doesn't stand down.
When we're $500 billion dollars down, they say Trump is starting a trade war. I say no. The trade war ended a long time ago. And the United States lost, because our leaders didn't take care of our people and our companies. The era of global freeloading and taking advantage of the United States is over. It's just over.
Now, to the Bulgarian capital, Sofia, where leaders from China and 16 central and Eastern European countries are meeting on Sunday. The summit is likely to focus largely on Chinese funded infrastructure investments. But the meeting is made up of 11 countries, such as Hungary, Poland, and Bulgaria, that are also European Union member states. And some EU diplomats have voiced concern in private that China may also use the summit for political purposes.
What we're really talking about is particularly, any attempt by the EU to try to screen out Chinese investments into the region. Also, there are questions over the EU's statements on human rights that could criticise China, and as we've seen in the past, some of the EU's statements on China's encroachment into the South China Sea. All of these areas where the EU is concerned that this grouping, the 16 plus one, could tend to undermine the EU's cohesion and its unity in the face of Chinese pressure.
The Independence Day holiday on July the 4th means it's a short working week in the US. But the economic calendar still looks busy. And it's the June non-farm payroll report on Friday that will grab the headlines. Hiring is expected to have cooled, while wages edge up. The US economy is likely to have created 198,000 jobs in June, compared with 223,000 the previous month. And the unemployment rate is expected to hold steady at 3.8%. Markets will also be watching for updates on the manufacturing and services sectors. And investors will examine the minutes of the Fed's June monetary policy meeting on Thursday, watching the possible discussions on inflation.
The details of the US jobs report last month were overshadowed by a tweet from Donald Trump. The President breached US government protocol by tweeting that he was looking forward to the data an hour before the report was released. His tweet also prompted a shift in markets, as traders anticipated that the report would be strong. And barring any similar breach this time around, attention should turn to the report itself, which is expected to show that hiring cooled in June. Investors will pass through the report to see which industries were in fact hiring, and which were shedding jobs. They'll also be watching to see if trade warfare concerns are feeding through to the jobs report just yet. For now, Fed Chair, Jay Powell, seems to think that the US economy is in great shape and is providing a really good environment to find jobs.
And finally, the UK's NHS turns 70 on Thursday. The taxpayer funded health service has become a symbol of British values, such as equity and humanity. But as it enters its eighth decade, questions loom over whether it has the resources to provide the timely care that a developed nation expects. The UK Prime Minister, Theresa May, recently promised the NHS an additional $20 billion pounds a year of funding by 2023. But it isn't clear how the money will be raised. The increase also falls below the level the independent expert said was required to deliver much needed improvements.
In terms of survival after certain kinds of cancer and heart attacks, the length of survival is below average for developed nations. And when it comes to conditions amenable to health care, which you could express as keeping people alive, the NHS actually was in the bottom 3 out of 18 developed countries. So I think that shows that as it turns 70, there are consistent concerns about quality.
And that's what the week ahead looks like from the Financial Times in London.