Trump and the art of negotiation. The Americans failed to obtain sufficient commitments from China during this first day of negotiations in Washington. The United States has therefore put its threat into effect: At 00:01 a.m. (ET), customs duties rose from 10 to 25% on a total of 200 billion dollars worth of products imported from China. "China deeply regrets this, and will have no choice but to take necessary retaliatory measures," said the Chinese Ministry of Commerce. Despite this decision, which further amplifies tensions between the two sides, discussions continue today. "We hope that the United States and China will go to each other and work together to solve existing problems through cooperation and consultation," the Chinese ministry added. Trump believes it is "possible" that an agreement will be reached this week... if the Chinese comply with his terms. Indeed, the United States decided to carry out its threat in order to put pressure on the Chinese and keep its hand in the negotiations. As it takes 40 days for ship deliveries to reach the American continent, it still leaves enough time for the two world powers to reach a compromise.





The Rest of the World is suffering from the Sino-American trade dispute. After Christine Lagarde's warning earlier this week, it was this time the institution's spokesperson who spoke. Gerry Rice warned yesterday that tensions between Beijing and Washington were "a threat to global growth" and that "everyone loses out in the event of prolonged conflict". He hopes for "an early resolution to these discussions".

Supporting the middle class. In his speech in Washington yesterday, Jerome Powell called for "strong public policies" to reduce inequality and support the middle class - which has been in decline for several decades.

The British did not prepare for the European elections. As no agreement on Brexit has yet been reached, the United Kingdom will have to participate in the European elections at the end of this month. Indeed, even if a compromise were to be found in the meantime, it would have to wait until it was ratified, and as Deputy Prime Minister David Lidington pointed out, with "the little time left (...), it is unfortunately not possible to complete the legislative process before the legal date of the European elections". The problem is that the government has so denied the possibility of participating in elections that it has not prepared for them at all. Elections will be held in the United Kingdom on May 23. Very low electoral scores are feared.

Mixed economic statistics in the United States. The producer price index came out as expected at 0.2% in April (but below expectations for the "core" index, which excludes energy and food). Weekly unemployment claims were above estimates at 228K (215K consensus). The trade deficit is lower than expected (-50 billion dollars in March, while analysts were expecting -51.4 billion). The consumer price index will be released this afternoon.