Sports Direct's Mike Ashley calls for web tax to save 'dying' high street - as it happened

Graeme Wearden

from Economics | The Guardian on 2018-12-03 19:53 (#4469A)

UK retail boss calls for new tax on web retailers, and faces criticism over House of Fraser takeover

Latest: UK retail magnate Mike Ashley at parliament
Ashley: Tax companies who do >20% of business online
Ashley: Only God could keep all House of Fraser stores open
Video: Mike Ashley on future of retail

7.53pm GMT

Finally, here's Sarah Butler on Mike Ashley's views on the high street crisis:

6.16pm GMT

Britain's high street might be in better shape if it could sell tickets to watch Mike Ashley in action.

It's not my fault the high street's dying, is it? It's not House of Fraser's fault, it's not Marks & Spencer's fault, it's not Debenham's fault.

It's very simple why the high street is dying - it's the internet. The internet is killing the high street.

Sports Direct won't be pleased with me for my suggestion. It's not necessarily a good fix for Sports Direct , but it's a fantastic fix for the high street.

So Ashley is suggesting a 20% tax on internet businesses, but with some kind of exemption for click and collect sales.

The high street won't make 2030, it won't get there, unless you do something really radical and grab the bulls by the horns.

Mike Ashley: "You have to tax the internet for the good of the high street....tax the web boys 20 per cent."

He's already described the high street as "dead, dead, dead...flat-lining...in the bottom of the swimming pool."

"Everybody has to come together and look at this.

I know it sounds very socialist, I'm not this crazy capitalist that everybody thinks I am."

Mike Ashley's like a cross between Del Boy and David Brent.

But he understands retail better than the MPs grilling him - and amid the monologues he's said plenty of interesting things. pic.twitter.com/DgtOBaR3f7

What person could keep 59 stores open - beside God? It's impossible, it can't be done.

'I'm not comparing myself to God... I'm not sitting my office stroking a white cat.'

More highlights from Mike Ashley's evidence to MPs on the state of high streets:@itvtynetees @itvcalendar pic.twitter.com/uhF2J4hLCi

5.37pm GMT

And finally, Mike Ashley hinted that House of Fraser could work closer with Debenhams (in which he owns a stake).

He tol MPs:

"I told them to work together. They should work together

5.25pm GMT

Mike Ashley winds up his hearing with a prediction -- Harrods and Selfridges will have a good year.

One of the reasons that House of Fraser failed is that it didn't elevate itself, Ashley continues.

Luxury brands are on the up. Teenagers, people today, want to wear their wealth.

5.22pm GMT

Mike Ashley returns to his big theme - the internet has killed the high street.

He tells the MPs:

The web has killed the high street, not the local councils, not this, not that.

It is just going to die, and you'll be left with Oxford Street and Bond Street.

Outside of London, it's going to be a ghost town. Sorry, that's what it's going to be.

5.15pm GMT

Interestingly, Mike Ashley says that local councils have helped keep House of Fraser stores open since his Sports Direct chain took it over this year.

Ashley tells the committee that some landlords have refused to cut the rent, in the hope that the department store will close - freeing them up potentially turn it into housing.

I accept House of Fraser cannot have 500,000 square feet in Birmingham. Honestly, you would need an Uber to take you round. It's ridiculous.

5.01pm GMT

Q: There are reports that high street rents might crash next year, by 20%. Wouldn't that be good news for the retailers? But wouldn't rents NOT fall, if landlords were able to turn high street stores into residential units (as some campaigners have asked for)

You'll make me hated by every landlord in the country, but you're absolutely correct, Ashley replies.

4.59pm GMT

Labour MP Liz Twist, who represents the Bladon in North-East England, asks Mr Ashley to meet with her to discuss the fate of the House of Fraser Metro store.

No, absolutely not, Ashey replies.

4.53pm GMT

Q: What's happening with House of Fraser stores, and your push to cut rents?

Mike Ashley says local councils are refusing to cut rents, because they can see that HoF stores are profitable...but they're not recognising the overhead costs behind the scenes.

You don't even understand what they're talking about, and they'll say 'I can make that store loss-making, or I can make it profitable'.

4.46pm GMT

The underlying problem in UK retail is the web, says Mike Ashley, as he continues to brief MPs on the future of the high street.

Looking magnanimously at the Housing, Communities and Local Government Committee, he adds kindly:

It's not your fault, you didn't do it.

4.45pm GMT

Q: Why is there such a problem with rents in the retail sector?

Landlords and retailers have always been uneasy bedfellows, says Mike Ashley. And whenever one has the upper hand, he "gets out his hammer" and bashes the other one.

4.41pm GMT

If you're just tuning into Mike Ashley's hearing on the future of the high street, here's what you've missed...

Mike Ashley evidence to Commons Select Committee:
-The High Street is at bottom of the swimming pool
-It requires electric shock treatment
-It's not my fault
-I don't sit in an office stroking a white cat
-I'm not God
-I'm not Father Christmas pic.twitter.com/STgk4chS5V

4.38pm GMT

Mike Ashley now concedes that it would be difficult to implement his plan for a new tax on web companies, but insists that it's simple in principle.

[Reminder, the idea is a new levy on any retailer who does over 20% of its business online]

Sports Direct won't be pleased with me for my suggestion. It's not necessarily a good fix for Sports Direct , but it's a fantastic fix for the high street.

The high street won't make 2030, it won't get there, unless you do something really radical and grab the bulls by the horns.

4.31pm GMT

Q: How would your plan for a new tax on web retailers work when people buy goods from abroad?

In theory you could still tax them, Ashley insists, but agrees that overseas retailers would have to sign up to pay it.

4.28pm GMT

High stores have to change, it's not just about a sea of clothing any more, says Mike Ashley.

He suggests retailers need to be much more innovative -- maybe with different opening hours, more self-service tills.

4.20pm GMT

In another burst of blue-sky thinking, Mike Ashley suggests high street stores could offer services such as free computer gaming to lure customers in.

4.18pm GMT

Retail analyst Neil Saunders isn't impressed:

Tax the web by 20%, says Mike Ashley. Maybe he forgets people already pay 20% VAT on most non-food. Making people pay 40% sales tax is ludicrous. Idiotic solution to a complex problem.

4.17pm GMT

Here's some video clips of Mike Ashley in action:

"Everybody knows you went in House of Fraser and it was like nobody was in there. The only people who were in there appeared to be the staff."

House of Fraser boss Mike Ashley on combative form answering questions from MPs.@itvtynetees @itvcalendar pic.twitter.com/AD5Nn8wB1Q

4.11pm GMT

Mike Ashley now insists that he doesn't "sit in an office stroking a white cat", trying to decide which House of Fraser stores to shut following this year's takeover.

Of course I'm worried about the state of the high street, he continues.

It's not my fault the high street's dying, is it? It's not House of Fraser's fault, it's not Marks & Spencer's fault, it's not Debenham's fault.

It's very simple why the high street is dying - it's the internet. The internet is killing the high street.

"The internet is killing the high street", you have to address that problem if you want to save the high street says Mike Ashley

Mike Ashley wants sales tax of online business where online is >20% of sales, which he says will make multichannel retailers invest in high streets in order to maintain <20% online penetration to dodge tax.

4.02pm GMT

Q: You promised to turn House of Fraser into the Harrods of the high street and keep its 59 stores open, but now people are worried that their local store will close. How will you decide which stores to shut?

Ashley looks like he's going to burst a blood vessel.

I never said I would keep 59 stores over. Never, never, never...

What person could keep 59 stores open - beside God? It's impossible, it can't be done.

Mike Ashley is being grilled by MPs.

"If I managed to keep 80 per cent [of HoF stores] open that might be a God-like performance...and before anybody says it I'm not comparing myself to God..."

3.56pm GMT

Over in the UK parliament, the boss of retailer Sports Direct is testifying to MPs about the future of the high street.

But Mike Ashley actually finds himself fending off tough questions about his company's business practices, following the takeover of House of Fraser.

Mike Ashley is in front of the HCLG committee and is upset because a session that's supposed to be about the future of the high street has started off with questioning about House of Fraser gift cards post-administration and rescue

"I can't, it's impossible what you're asking. It doesn't make sense.

The high street has to change what it offers consumers.

Stop trying to showboat... I thought we were here to save the high street.

This is going to be a long hour for Mike Ashley. Wants to talk about the high street...has been asked about House of Fraser administration and now being tackled on zero hour contracts...

"The only people in there appeared to be the staff" Mike Ashley on House of Fraser

Mike Ashley tells MPs to "stop showboating" by asking him questions about House of Fraser. "I thought we were here to talk about the high street."

Mike Ashley already seems quite angry in meeting with MPs. He defends use of zero hours contracts an says vast majority of sports direct staff want to be on them

Mike Ashley tells MPs to "stop showboating" by asking him questions about House of Fraser. "I thought we were here to talk about the high street."

3.37pm GMT

For all Donald Trump's optimism, many financial analysts are unconvinced that the US and China can settle their trade dispute in just 90 days.

Reforming Beijing treatment of intellectual property will take much longer, and there's only so much US produce which China can really absorb to help mop up the trade gap.

"To be sure, underlying problems remain unresolved. It is not as though existing tariffs are on the verge of being unwound. But what Xi has managed to extract from Trump is a stay on any escalation for three months. That interlude should see a stronger effort to set a framework for more talks and quid-pro quos.

"The best one can hope for in three months' time is a trade and geopolitical deal in which we see a road-map for China to materially raise oil and agriculture imports from the U.S. to cut the bilateral surplus by more than one-half in about 1-2 years' time. That will result in a diversion of Chinese imports from U.S. foes such as Russia and Iran, and possibly Saudi and rest of OPEC. I would imagine the Chinese would also acquiesce to at least some softening of U.S. access to technology and finance in China. Signals to this effect came from Xi suggesting he would not object to the Qualcomm-NXP deal if this were presented again.

"The highest priority for the Chinese authorities at the moment is to stabilize their economy. In this context, a 90-day truce should boost local sentiment, and prove more important from a psychological standpoint than recent policy stimulus which was seen as tepid, if not grudging.

3.13pm GMT

In another boost to the White House, the US manufacturing sector has posted another month of strong growth.

The Institute for Supply Management has reported that new orders, employment levels and activity also jumped last month, while the prices paid by manufacturers fell.

3.02pm GMT

There are some major names among the big movers on Wall Street today.

Aircraft maker Boeing has gained 6%, construction and machinery business Caterpillar is up 4%, and Apple has gained 2.6%. That suggests investors are optimistic that the trade war time-out will yield results.

The rally seen this morning in equity markets show that the escalating trade disputes are a significant concern to the global growth outlook of the world economy. Whilst its very early days and the process of normalising the trading relationship with China is going to be a complex process - today, at the very least is a signal that those negotiations can begin.

Riskier assets such as base metals and oil producers, as well as the US and European car manufacturers and associated supply chains are likely to show the most positive reflection of the news as they have borne the brunt of the negative headlines for most of this year."

2.54pm GMT

At 2.54pm FTSE 100 up 103 points st 7083 - DJIA up 342 points at 25881

2.36pm GMT

After a minute's silence to honour President George H.W Bush, Wall Street has opened, and shares are rallying hard.

The Dow Jones industrial average has jumped by 412 points, or 1.6%, to 25,950, in early trading, following upbeat comments from Donald Trump and Stephen Mnuchin in the last couple of hours.

"The 90-day truce in the Sino-US trade war agreed between President Xi and President Trump in Buenos Aires is a welcome development in reducing tension.

The very fact that both sides have reopened dialogue is a good step forward and should help sentiment and asset prices in emerging markets. Of course, hard yards lie ahead in reaching a comprehensive agreement, but for now, both sides can claim a "win". US consumers can cheer that their manufactured-in-China favourites like iPhones will not be increasing in price for Christmas.

NYSE holds one minute of silence in honor of President George H.W. Bush pic.twitter.com/uqHgwuB28t

2.28pm GMT

Donald Trump is claiming that China's promise to cut tariffs on US car imports, from 40%, is a win.

However, Beijing only raised the tariff to 40% this summer after the US launched its trade war. A few months earlier, China actually cut the tariff from 25% to 15%.

Keep in mind:
China's current tariff on US cars is 40%.
China's current tariff on other foreign cars is 15%.

Trump says China is "reducing and removing" tariffs. That might just mean getting US back to 15% level as trade war cools. #trade

Agree with @byHeatherLong.

Pretty sure China won't go below 15% just for the U.S.

And BMW is making a major investment in China (China let it take control of its JV) which suggests that it will be hard to return to the previous level of US exports to China in a durable way. https://t.co/RMx6Ou2GLd

2.18pm GMT

Mnuchin says the Buenos Aires dinner lasted over three hours, says it included "a very detailed discussion." Says "I'm taking president Xi on his word and his commitment to President Trump, but they have to deliver on this." pic.twitter.com/YnNYtkEdke

1.24pm GMT

US treasury secretary Stephen Mnuchin is also cheering the trade war truce.

Speaking on CNBC a few moments ago, Mnuchin says that the 90-day hiatus is a significant step:

This is the first time that we have a commitment from them that this will be a real agreement.

"They put on the table an offer of over $1.2 trillion in additional commitments. But the details of that still need to be negotiated.

This isn't just about buying things. This is about opening markets to U.S. companies and protecting U.S. technology. Those are very important structural issues to the president."

Treasury Sec. Mnuchin tells CNBC he is 'hopeful' they can turn Trump-Xi discussions into real trade agreement https://t.co/VnZ4mpxWmP

1.21pm GMT

More optimism from the White House:

President Xi and I have a very strong and personal relationship. He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations. A solution for North Korea is a great thing for China and ALL!

1.03pm GMT

The US president is awake, and in an effusive mood after his negotiations with Xi Jinping on Saturday night.

Donald Trump is tweeting that the trade truce can be a win for both the US and China -- a point analysts have also made today.

My meeting in Argentina with President Xi of China was an extraordinary one. Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!

Farmers will be a a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU!

"The much anticipated dinner between the two leaders resulted in the first major breakthrough since talks broke down in May. For now, China has agreed to buy more US products, including agricultural goods, and to tackle the trade imbalance concern. President Xi also agreed to designate fentanyl a controlled substance, in a move which was described as a "wonderful humanitarian gesture" in a statement issued by the White House on Saturday.

"On trade, President Trump said the US will not go ahead with the implementation of a 25% tariff rate scheduled for January. The tariffs on $200 billion worth of products will be left at the 10% rate for the next 90 days while both parties attempt to negotiate structural changes.

12.55pm GMT

Stephen Cooper, Head of Industrial Manufacturing at KPMG UK, is concerned by today's UK factory data (even though anxious stockpiling drove growth up):

"Brexit and supply chain worries have dented November's UK manufacturing data, with muted growth and optimism at a 27-month low.

"The continued decline in export orders is something manufacturers need to be mindful of, particularly as the Eurozone's Manufacturing PMI numbers for last month were relatively flat and there are are also wider global demand concerns. With the Eurozone as such an important market for the UK, manufacturers need to prepare carefully for Brexit and ensure they understand every aspect of their supply chains."

12.51pm GMT

What are the terms of the truce between the US and China?

12.43pm GMT

Here's a handy chart showing how the trade dispute intensified this year, as the US and China exchanged tit-for-tat tariffs.

pic.twitter.com/HrI8MRx2YW

12.30pm GMT

Tony Fratto, a former White House deputy press secretary, will believe China's tariff cuts when he sees them....

I know not everyone follows trade very closely, but try the Google machine from time to time. This isn't the first time Xi has promised to reduce auto tariffs. It's probably not the last time, either.

11.58am GMT

Influential investor Mohamed A. El-Erian of Allianz reckons the US-China trade truce is a quadruple win, at least in the short term.

He writes:

At the end of almost three hours of what the White House called "highly successful" discussions, the U.S. agreed to refrain for 90 days from implementing additional tariffs on $200 billion of imports from China. In return, China promised to use the time to make progress in three areas of concern to the U.S. and other countries: relaxing an array of nontariff barriers, including joint-venture requirements, that result in forced transfers of technology, operational models and other proprietary information and business practices; combatting intellectual property theft and other cyber interferences; and reducing the bilateral trade surplus by importing "very substantial" quantities of certain goods from the U.S.

This outcome is a short-term win for both sides, as well as the global economy:

Thoughts on why the #G20 weekend is an immediate win x 4 - for the #US, #China, the global #economy and #markets.
Beyond the immediate, there's a pathway for consolidating gains but it's far from certain.https://t.co/JKnI1X38Li @bopinion @business @realdonaldtrump #Xi #Argentina

11.41am GMT

The trade war time-out may come too late for some American farmers.

As this chart shows, soybean exports from the US to China usually peak in October and November, but not this year due to the trade dispute.

News that #China and the #US are to resume trade talks provides some reprieve for commodity prices. However, it is unlikely that Chinese purchases of US #soybeans surge as a result of the latest truce. #G20Summit
Clients can read more:https://t.co/sMLPzYn8Ga pic.twitter.com/RE5ep1kQP4

11.40am GMT

Wang Cun, director of the China Automobile Dealers Association's import committee, has welcomed the suggestion that car tariffs will be cut.

Wang told reporters in Beijing that:

If they cancel the extra 25 percent tariff on US-made cars, then we will see positive signs for imported cars,"

11.00am GMT

Wall Street is on track for a big jump when trading begins in three and a half hours.

The Dow Jones is currently up 2%, or 500 points, in the futures market.

If a two-month delay is worth 500 points for the Dow (judging by futures action), what would an actual agreement be worth? https://t.co/BCvhKmdOLp

10.55am GMT

Shares in European car companies are surging, after Donald Trump tweeted that China has agreed to cut tariffs on auto imports.

Daimler are leading the pack, up 7%, in Germany followed by BMW (+6.6%) and Volkswagen (+4%). They all have factories in the US, so should benefit from a cooling in trade war tensions. Tire maker Continental is up 3.5%.

10.06am GMT

Shares in fashion chain Ted Baker have plunged by 13% this morning after the company's founder was accused of forcing staff into hugs, massages and other inappropriate conduct.

My colleagues Sarah Butler and Jasper Jolly reported yesterday that current and former Ted Baker staff had accused Ray Kelvin of harassment.

More than 60 current or former staff are understood to have come forward to the employee campaigning platform Organise with complaints about Kelvin's alleged behaviour, including kissing ears and giving unwanted hugs and shoulder massages.

Organise published a petition, signed by more than 1,000 people, calling for an end to forced hugging, saying: "It is part of a culture that leaves harassment unchallenged." It also calls for new procedures allowing employees to report harassment to an "independent, external body".

Hugs have become part of Ted Baker's culture, but are absolutely not insisted upon."

JUST IN: Ted Baker shares extend losses, now down 10.7 percent after company says it will investigate claims against CEO https://t.co/XdRRhbJOnC pic.twitter.com/aw30b88Zod

9.53am GMT

Ladies and gentleman -- we have stockpiling!

" UK factory PMI rises much more than expected to 53.1
" Even as export orders contract for 2nd month
" BUT! IHS Markit says pickup not really down to healthy domestic demand
" It's stockpiling
" Optimism at 27-month low

9.43am GMT

Newsflash: Britain's manufacturing was unexpectedly strong last month, as companies rush to stockpile products ahead of a Brexit crisis.

Markit's UK factory PMI, which measures activity in the sector, has jumped to 53.1 for November, up from October's 27-month low of 51.1.

"While demand from the domestic market was a positive spur, in some cases as clients built up stocks in response to Brexit and other supply-chain uncertainties, manufacturers also reported a further decrease in new export business as slower global economic growth and Brexit worries took a bite out of foreign demand.

Brexit worries also increasingly dominated the outlook for the sector. Although still forecasting growth for the year ahead, manufacturers' confidence fell to its lowest ebb since August 2016."

9.28am GMT

It's official: Europe's factory sector slowed last month.

Data firm Markit reports that its eurozone manufacturing PMI fell to 51.8 last month, down from 52 in October. That's the weakest growth since August 2016, and close to the 50-point mark that shows stagnation.

#France #manufacturing #PMI signals weakest performance since September 2016 as growth slowdown is exacerbated by demonstration-related disruptions https://t.co/b5wHMaNmOz pic.twitter.com/9E6Hvmoq64

Unexpected good news for European economy. Manifacturing #PMI rose in November in the Euro area (51,8, expected 51,5), in France (50,8, expected 50,7), in Germany (51,8, expected 51,6). It decreased in Italy (48,6, expected 48,9). @graemewearden

9.12am GMT

UBS analyst Paul Donovan suggests investors shouldn't get too excited about the US-China trade truce.

US President Trump may, metaphorically, be claiming to have a tweet on Twitter that promises trade peace in our time. The reality of the US-China handshake deal at the G20 is not that secure. The deal looks to be a variation on the Juncker-Trump EU handshake deal.

8.56am GMT

City traders often talk about a 'Santa Rally', in which shares end the year with solid gains.

And this year, Santa may be coming early.... as the Trump-Xi truce boosts confidence across the financial markets.

"December is starting with a bang, with a de-escalation in Sino-US tensions positive for risk. Donald Trump tweeted yesterday that China 'will reduce and remove' tariffs on US auto imports, amid signs of progress on trade talks.

It follows a more positive G20 meeting. The US will delay for 90 days any increase in tariffs to enable talks to take place. The US had planned to raise its 10% tariff on $200bn of Chinese goods to 25% on January 1^st.

8.46am GMT

European stock markets are a sea of green this morning, with gains across the board.

"Even though it's a 90-days truce and both U.S. and China still need to sort out multiple issues in this period, from markets' perspective getting past the event risk with a positive outcome and de-escalation of tensions is clearly positive for risk sentiment."

8.19am GMT

Progress!

JUST IN: U.S. and China presidents instructed economic teams to work towards removing all tariffs - China's foreign ministry pic.twitter.com/1lif9OFMvg

8.10am GMT

Mining stocks are surging sharply in London too.

Anglo American, Glencore and BHP Group have all gained at least 6% this morning, on the prospect of higher demand for iron ore, copper and coal.

8.06am GMT

Boom! Shares in London have surged to a two-week high at the start of trading.

The FTSE 100 has jumped by 1.5%, or 102 points, to 7,082, as the US-China trade truce cheers investors.

7.58am GMT

Soybeans prices are moving sharply this morning, on relief that Washington and Beijing have backed away from a deeper trade war.

"The price spike in Chicago soybeans and the fall in Dalian is a normal market reaction to the U.S.-China trade truce because China has agreed to start buying agricultural products from American farmers immediately," said Monica Tu, an analyst at researcher Shanghai JC Intelligence Co.

Still, "the market is very concerned about the outcome of further negotiations," and whether there will be big purchases in the next few weeks, she said.

7.51am GMT

China's currency is strengthening, on relief that America has decided not to hike tariffs on Chinese imports at the start of January.

The yuan has jumped by 1% against the US dollar, to 6.88 to $1. That's up from 6.954 on Friday night, before the G20 summit got up to speed.

What was delivered over the dinner was not a breakthrough, neither a long-term solution for the ongoing trade war between the largest two economies, but a 90-day window to improve relations.

Introduction of new tariffs are now shelved, and trade talks will intensify over the next three months. This outcome seems to be an optimistic one from the two leaders and more than what was priced into markets beforehand, meaning that this is enough to boost sentiment and risk-on trade.

I am yet to speak to a single person who thinks the three month tariff detente is actually a meaningful medium-long term development in the trade disputes https://t.co/E6k7OYvmGt

7.38am GMT

Chinese newspapers have cheered the truce hammered out between Trump and Xi at the G20 leaders meeting.

Official online statements about Chinese Foreign Minister Wang Yi's briefing on the meeting did not discuss the technology transfers or the 90-day condition.

The timeframe and details on areas of disagreement also did not appear in online reports from China's state news agency Xinhua, People's Daily - the official Communist Party paper - and CGTN - the English-language version of state broadcaster CCTV.

7.30am GMT

Sue Trinh of Royal Bank of Canada is cautious about this trade truce -- pointing out that the US and China haven't released a joint statement on what was agreed.

Trade wars need to be framed in terms of who hurts the least and see the G20 meeting as a stronger win for the US.

China buys 3 months before tariffs on $200bn in goods rise to 25% while the US knows it will have a deal with sizeable China concessions in 90 days, or go ahead with tariffs having cleared the backlog of harvested crops from the agri sector.

The negotiation is likely to remain challenging given the competition in a number of areas, especially technological development between the two countries. 90 days is not a very long to resolve these differences.

The good news is that this truce should be seen as Washington recognising the potential damage on the U.S. economy if tariffs escalate further. We see an ongoing dialogue between the two sides to be an important catalyst for Asian markets to recover lost ground this year, alongside steady global growth and a weaker US dollar."

7.10am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

"This was an amazing and productive meeting with unlimited possibilities for both the United States and China.

It is my great honor to be working with President Xi."

China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.

With the immense weight of the global supply chain dynamic network on their shoulder, a tariff detente has emerged after a highly anticipated dinner.

Both Presidents' XI and Trump have agreed to put on hold the menacing tariff increases expected to get imposed January 1, marking a significant de-escalation in trade tensions between the world's two biggest economies. Thankfully, for risk sentiment, the "dinner date of the decade" ended with a sense of harmony rather than trade war discord.

Firm opening across all European Indices:#FTSE 7094 +1.63%#DAX 11519 +2.32%#CAC 5092 +1.75%#MIB 19486 +1.55%#IBEX 9221 +1.59%

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