G20: world leaders urge Trump and Xi to reach a trade deal or risk global economy

Financial markets fall amid growing fears that talks in Osaka will fail to break logjam

Donald Trump and Xi Jinping have been urged to reach a trade deal or risk setting the global economy on a downward path as world leaders gathered in Japan for the G20 summit.

Russian president Vladimir Putin, Indian prime minister Narendra Modi and European president Jean-Claude Juncker heaped pressure on the two superpowers on Friday to settle their differences when they meet on the sidelines of the Osaka summit on Saturday.

But financial markets fell across Asia on Friday amid growing fears that the talks will fail to break the logjam and see the US president carry out his threat of additional tariffs on Chinese goods.

MSCIs broadest index of Asia-Pacific shares outside Japan fell 0.3%, with weakness in Chinese equities weighing on the broader region. The Shanghai composite was down nearly 1% while Japans Nikkei stock index was 0.55% lower.

Trump has adopted a belligerent position ahead of the meeting, saying that China was desperate to reach a deal because its economy was going down the tubes.

Xi hit back on Friday by saying that some developed countries were taking protectionist measures that are leading to trade conflicts and economic blockade – calling them the biggest risk of the increase in instability in the global economy.

All this is destroying the global trade order, he told leaders of the so-called Brics nations (Brazil, Russia, India, China and South Africa) in Osaka.

Japans prime minister, Shinzo Abe, urged G20 leaders to work together to defuse trade and political tensions, describing them as threats to global economic growth and stability.

Abe, eager to avoid Japans first G20 summit descending into rancour, said free and open economies were critical to peace and prosperity, adding that no one would benefit from retaliatory moves over trade.

Trump has also threatened Japan over what he calls its unfair advantage on trade. Abe, who hosted the US president on a lavish state visit last month, began the summit by handing him a document outlining Japanese carmakers recent investments in the US.

US President Donald Trump and Japans Prime Minister Shinzo Abe shake hands at the G20 Photograph: Mikhail Metzel/TASS

Trump said before his bilateral with Abe on Friday morning: I appreciate the fact that youre sending many automobile companies into Michigan, and Ohio, and Pennsylvania, and North Carolina a lot of our states. I see theyre building all over the United States, a lot of the great Japanese car companies and other Japanese companies also.

But in particular, the car companies have been terrific. Theyre coming in and theyre building magnificent plants. We havent had that, and we very much appreciate it.

So well be discussing trade. Well be discussing military. And well be discussing the purchase of a lot of military equipment by Japan, and we appreciate that.

Putin echoed Xis concerns at the same meeting, saying in a thinly veiled attack on the US that attempts to weaken the role of the World Trade Organisation as Trump has suggested he wants to do were counter-productive.

The current situation in the global economy was worrying, he added, as global trade was feeling the effect of protectionism [and] politically motivated restrictions.

Ahead of talks with Modi, Trump softened his warnings about tariffs on India and said were going to have some very big things to announce with India in terms of trade.

But that did not stop Modi joining the chorus of warnings about one-sided decisions that jeopardised the balanced development of the global economy for all countries. Juncker said the trade relations between China and the US were difficult and were causing a slowdown of the global economy.

Michael McCarthy of CMC markets in Sydney said that there was nevertheless some optimism that there would be a step forward in the trade negotiations, which broke down in May at the last minute.

However, he warned that despite the relative calm, the financial markets VIX volatility measure, known as the fear index, spiked to above 16%. This is a significant increase on the April low near 11%, he said, and shows investor fear is on the rise.

Hannah Anderson, JP Morgan Asset Management global market strategist, said the concern was that the markets had seen this movie before.

China and the US talk, leaks from policymakers on both sides encourage speculation we are close to a deal, things fall apart, the US presses forward with higher tariffs and markets express their displeasure with corrections and higher volatility.

The US dollar, which has fallen in the wake of signals from the US Federal Reserve that it will begin cutting interest rates soon, was flat against a basket of six major rivals. The Australian dollar, seen as a proxy for the Chinese economy, rose above US70c.

In commodity markets, trade worries continued to weigh on oil, with the global benchmark Brent crude down 0.56% to $66.18 per barrel. It was better for gold though as the traditional safe haven for investors rose to trade at $1,420.35 per ounce, up 0.79%.

With Reuters and Agence France-Presse

Original Article : HERE ; The Ultimate Survival Food: The Lost Ways

Top Rated Products


Internet Millionaire Reveals His Step-By-Step System For Earning6 Figures Passive Income With Kindle Publishing On Autopilot[...]


Fully automated with automatic step detection and automatic waypoints. Simple and easy to use. Step-by-step instructions. Compatib[...]


Fully automated with automatic step detection and automatic waypoints. Simple and easy to use. Step-by-step instructions. Compatib[...]


Start to lose weight, improve your health, and avoid diseases right away with the Paleo Diet Basics. Over 15 quick snack recipes t[...]


If you are serious about making money with your photography, then look no further Photography-jobs.net gives you fool proof, step [...]


If you are serious about making money with your photography, then look no further Photography-jobs.net gives you fool proof, step [...]

Enthusiastic Blogger

Extreme web junkie. Proud food advocate. Friendly tv buff. Travel ninja. Professional introvert.