He’s retaliating against French tech tax plans and says that import duty on French products to the US could go as high as 100%. The Office of US Trade Representatives has found that the tax the French are imposing “discriminates against US companies, is inconsistent with prevailing principles of international tax policy and is unusually burdensome for affected US companies”. This finding is bad news for other countries considering a similar tax, such as Turkey and Austria, as they’ll now be thinking twice. Though Trump hasn’t yet imposed the eye watering tariffs, this report essentially gives him the green light to impose them at will (not that he needs permission to do anything, apparently).

He’s also testing his multi-tasking ability by going after Brazil and Argentina for artificially weakening their currencies. Despite pretty much all economists saying that this isn’t the case – in fact, both countries have spent hundreds of millions of dollars trying to prop their currencies up over the past few years. Trump’s planning to bring in further tariffs on steel and aluminium – the US is their largest customer – but it’s not clear how much and when, as Trump announced this latest policy on Twitter out of the blue!

Jeremy Corbyn has written to Trump asking him to exclude the NHS from any future trade negotiations. Can’t imagine that lasting more than a few seconds on Trump’s desk before hitting the bin (invariably not a recycling bin either!). These two could actually meet at the Queen’s reception this evening – let’s hope we get some photos of that.

Meanwhile, on the election front; Labour are at their highest in the polls since the starting gun was fired. Labour’s plans to reduce rail fares by a third will be a big crowd pleaser – unless you’re on South Western and facing 27 days of strike action, then we imagine you’d pay whatever the going rate was for a service that worked –  Boris’ plan of keeping media appearances under strict control might come unstuck with the NATO summit leaving him more exposed than he’d like and it’s entirely possible that Trump might try and say some supportive words that could do more harm than good.

China’s not going entirely to plan at the moment for the US, as they’ve announced that US military visits to Hong Kong won’t be permitted. Military ships and aircraft are now forbidden into the area and on top of this a number of US NGO’s have been hit by sanctions for encouraging protests. This is also seen as retaliation against the US for them signing the Hong Kong Human rights and Democracy Act – the law that determines if Hong Kong is still independent enough from China to justify its special trading status with the US.

As well as Hong Kong, China is seeking to limit the US influence in other areas of its politics: they’re considering banning all diplomatic passport holders from Xinjiang – the region marred in controversy over it’s mass detention and brain washing of Uighur’s. As a reminder, here’s what the BBC had to say about it last month. Reuters has the news about the visa restrictions that diplomats may now face.

On US monetary policy; the Fed are considering letting inflation get ahead of target (read; keep rates lower, longer) to avoid weak price growth. It sounds simple enough, but the rule change in letting inflation run above 2% would be the biggest policy shift for them since 2012. The concern is that inflation will become persistently low as it is in Europe and Japan – which doesn’t help when you’re trying to inflate your way to a reduced debt pile. The FT has the story.

We mentioned last week that US earnings are going to fall well short of expectations – well nothing has changed. What is interesting is that a single investor has spent about $31m buying options that would pay out if the S&P traded below 2,980. This hedge protects almost $5bn of assets at a price that’s a fair few percent below where we are now. 

Lastly to much more local news. Over the weekend HCFX made it into the Sunday Times Virgin Atlantic Fast Track 100 list of the fastest growing companies in the UK. We’re not ones to blow our own trumpet, but this is definitely the moment to thank everyone that’s put in the hours, intelligence and creativity to get us there – both the team here and our clients – Thank you all.


Teamwork Makes the Dreamwork


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