1. Explained

Web EoD Test

Jan 1, 1970 12:00 AM 2 min read


 They say there's never a dull day in the news cycle and today's no exception! Here are the top Business news stories of the day:


    • Ravi Shankar Prasad forms committee to suggest reforms for telecom industry.
    • Mutual fund industry faces the repercussions of failing to self-regulate.
    • After a sluggish four weeks, the monsoon slowly picks up.
    • The monsoons and India – a love story as old as time.
    • The rise of cloud kitchens and ghost restaurants.
    • Food delivery and payment apps are launching games to cash in on the cricket fever.
    • Trump and Xi agree to resume trade talks.
    • Possible levers that the US and China could pull to get the best out of a trade deal.
    • Relations with India have never been better, Trump says.
    • Is all this hullabaloo over tariffs a charade?



Trump and Xi agree to resume trade talks. Possible levers that the US and China could pull to get the best out of a trade deal.

Mutual Understanding: The world’s two largest economies have apparently found a way to break an impasse and restart talks.

US President Donald Trump and Chinese President Xi Jinping met in Osaka on Saturday and held talks about the ongoing trade war between their countries. The results were substantial – Trump agreed to halt (for now) imposing 25% tariffs on the remaining $325bn worth of Chinese goods and allow sale of US products to Huawei.

Trade talks between Washington and Beijing, which had stalled in May, will now resume. A final trade deal, though, is still nowhere in sight.


Yesterday's poll question was:
"Do you think the new government's first Budget will succeed in boosting the slowing national economy?"
The results:
Yes - 40%
No - 40%
Can't Say/Don't Know - 20%

Pressure Points: Now that trade talks between the US and China will resume, expectations for a trade deal will rise again. But talks have stalled, resumed and broken down many times before. And there are many levers each country can pull to get the most out of the talks and out of a deal.

The US can use Huawei as a bargaining chip – and Trump has publicly indicated before that this could be a course of action for US negotiators. Washington can also threaten to hike tariffs further on the remaining $325bn-worth of Chinese goods, which would mean all Chinese goods would be victims of the trade war, and this would hurt the Chinese economy even further.

On the other side of the table, China could weaponise its monopoly on rare earth metals, which are necessary for everything from mobile phones to nuclear reactors. Beijing could also take the decision to dump US treasuries, taking advantage of the fact that it is the biggest holder of US government debt.

Furthermore, China could devalue its currency to make its exports more competitive and sanction specific American companies and individuals – but this would spook investors and elicit further sanctions from Washington over currency manipulation.

Then there are defence levers and military ultimatums. But that would be a last-resort option, only if talks deteriorate to the point of hostility.


That's all for today! See you again tomorrow in the next End of Day Wrap-up!