What’s going on here?

New signs emerged that the trade war is dragging down the global economy.

• The International Energy Agency cut its projection for energy demand this year by 100,000 barrels to 1.2 million barrels per day, citing the “worsening trade outlook” as a “common theme across all regions”;
• China reported the slowest growth in factory output since 2002;
• More than 500 U.S. companies (including retail giants Walmart, Target and Costco) said tariffs are hurting American businesses and consumers. A survey of CFOs found nearly half expected a recession by the middle of next year.

What’s next?

All of this increases the risk for the meeting between President Trump and President Xi at the G20 summit in Japan June 28-29:

• Trump has requested a meeting, and
• White House economic adviser Larry Kudlow said the president has threatened to raise tariffs further if Xi doesn’t agree.
• Apple CEO Tim Cook had a private meeting with the president yesterday to discuss trade, probably advising that public threats won’t help bring the Chinese leader to the table.

Content source: Murray. A. (2019) The Art of the Deal. CEO Daily Newsletter