Trump orders US companies to 'come home' from China – as it happened
Rolling coverage of economics, business and markets as the US president retaliates against China after Beijing unveiled fresh tariffs on American goods
- Trump orders US companies to "come home" from China
- Trump compares Powell with China's Xi Jinping
- BREAKING: China unveils tariffs on US goods worth $75bn
4.33pm BST
What an eventful end to this bank holiday Friday. Here's a reminder of the global events we covered off today:
4.17pm BST
US stock markets are back in the red after Trump's tweets:
4.15pm BST
Our colleague Dominic Rushe has full coverage of Powell's speech at Jackson Hole
Related: Fed chair Jerome Powell says Trump trade policies pose 'new challenge'
4.07pm BST
Not to be outdone by Beijing, Trump is now apparently ordering US companies to come home from China.
He insists the US would be "better off without" China, full stop:
....better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..
....all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop - it didn't. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!
4.02pm BST
Steen Jakobsen, chief economist at Saxo Bank, says Powell's speech has a something for everyone:
Fed's Chairman Powell delivers something for both doves & Fed feels trade and safety dictates an outlook which is ok but worsening https://t.co/LvUNBMbVMK
China changed the dynamics of event risk. September 1st now CRITICAL date. Observe USDCNH for indication of risk on/risk off pic.twitter.com/odY9nGro1f
3.59pm BST
The war of words between the White House and Fed continues. And even if it's more subtlety worded on the Fed's side, analysts say Powell is holding his own:
Powell condensed:
The nut in the White House means we can't do our job properly. Anything could happen. Bye.
Fed Chair Powell is rather more diplomatic in his language than the president - a low bar, admittedly - but it is clear from his speech that the single biggest factor driving both market volatility, the actual global slowdown, and fears of a U.S. slowdown, is trade policy, both its current stance and uncertainty about the future.
After a long discussion of how the Fed arrived at its current policy framework, Mr. Powell stuck the knife in, pointing out that "fitting trade policy uncertainty into this framework is a new challenge" [there are] no recent precedents to guide any policy response to the current situation" Moreover, while monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade."
3.44pm BST
Donald Trump has come out swinging after Powell's speech failed to signal that it will bow to presidential pressure to cut interest rates further.
....My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?
3.36pm BST
The US Fed boss added that the July interest rate cut - which was the first in more than a decade - had eased financial conditions and helps explain why the US inflation outlook and employment "remains largely favourable."
But he lists a number of recent "developments" that the Fed has kept an eye on, including (drumroll, please):
Equity markets have been volatile. Long-term bond rates around the world have moved down sharply to near post-crisis lows.
Meanwhile, the U.S. economy has continued to perform well overall, driven by consumer spending.
3.29pm BST
More highlights from Mr Powell's speech.
He has hailed the strong performance of the US economy, at least on balance:
The outlook for the US economy since the start of the year has continued to be a favourable one.
Business investment and manufacturing have weakened, but solid job growth and rising wages have been driving robust consumption and supporting moderate growth overall.
Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States. Inflation fell below our objective at the start of the year. It appears to be moving back up closer to our symmetric 2% objective, but there are concerns about a more prolonged shortfall.
3.22pm BST
Equity markets seem to have been soothed - if only slightly - by Powell's comments.
The S&P 500 is now just trading lower by around 0.16% compared to minus 0.43% earlier.
3.15pm BST
Powell alludes to Washington's trade war with China, saying the central bank is well aware of "trade policy uncertainty" but is powerless to influence trade deals despite their affect on the US economy:
Setting trade policy is the business of Congress and the Administration, not that of the Fed. Our assignment is to use monetary policy to foster our statutory goals.
In principle, anything that affects the outlook for employment and inflation could also affect the appropriate stance of monetary policy, and that could include uncertainty about trade policy.
3.08pm BST
The Federal Reserve has released Jerome Powell's speech at Jackson Hole. Here are some highlights:
2.53pm BST
Hello, Kalyeena here, taking over to cover Mr Powell's Jackson Hole speech expected in less than 10 minutes' time.
Meanwhile, we have the full story detailing China's retaliatory tariffs on $75bn worth of US goods.
Related: China puts $75bn of retaliatory tariffs on US goods
2.36pm BST
Jerome Powell is shortly about to start speaking in the US - he starts at 8am Jackson Hole time, 3pm BST. Here's a quick guide on what to look out for.
At issue are market expectations that the Federal Reserve is planning to cut rates multiple times in the next two years in response to slower growth.
2.32pm BST
Wall Street has fallen at the opening bell in the wake of the Chinese tariff announcement.
The S&P500 benchmark index lost 0.45%, the Dow Jones industrial average lost 0.5%, and the tech-heavy Nasdaq lost 0.56%.
2.31pm BST
Donald Trump is awake, putting more pressure on Powell to cut rates.
The next decision isn't due until 18 September, but it is pretty clear what the US president wants to see.
Now the Fed can show their stuff!
1.58pm BST
Monetary policymakers like Powell have little room for manoeuvre when it comes to adjusting to shocks like the trade war, writes Nouriel Roubini, a professor of NYU's Stern School of Business and former White House adviser.
Central bankers do not have the tools to deal with the trade war - and the associated geopolitical battle for supremacy in technology.
It is easy to imagine how today's situation could lead to a full-scale implosion of the open global trading system. The question, then, is whether monetary and fiscal policymakers are prepared for a sustained - or even permanent - negative supply shock.
Related: The next global recession will be immune to monetary solutions | Nouriel Roubini
1.49pm BST
The timing of the announcement could barely be more difficult for Powell, who is due to speak in 90 minutes' time.
The central bank chief will have carefully thought through his wording on the trade war, with Trump's White House breathing down his neck. He will have little time to think through adjustments this morning, despite it representing a major development adding to one of the biggest risk factors to the global economy.
BREAKING: China announces retaliatory tariffs on $75 bn of US exports
Note: Products NOT currently hit by China's retaliatory tariffs - ie, GREY bar minus RED bar ($, billions):
Autos and parts = 14.3
Aircraft = 14.1
Elec machinery = 10.2
...
Sourcehttps://t.co/tTZi444JH9 pic.twitter.com/dMdkGiHRK3
1.34pm BST
As well as giving Jerome Powell a major headache, the tariff announcement has meant that European stock markets have made an abrupt u-turn.
Germany's Dax, heavily dependent on exports, has fallen by 0.9% today, while the broader Stoxx 600, which looks across Europe, has lost 0.3%.
Well played, China. Just before Powell's key Jackson Hole speech and before US markets open
1.31pm BST
We have confirmation of the trade action hinted at by the Global Times editor earlier: China will impose tariffs on American exports worth about $75bn.
China's ministry of commerce said it will impose levies of 5% and 10% on more than 5,000 products originating in the US, with crude oil, small aircraft and cars among the items targeted, Reuters reported.
1.09pm BST
...and for those who drink at lunch on a Friday, here's a great dispatch from the G7 in Biarritz, where a tariff on French wine could be in the offing after Emmanuel Macron targeted US tech firms with new levies.
French wine-makers are increasingly concerned about Donald Trump's threats to introduce high tariffs on French wine in retaliation for Emmanuel Macron's tax on global technology giants, writes the Guardian's Angelique Chrisafis.
12.56pm BST
Perhaps you've already had your lunch, but if not here's more to whet your appetite: the prospect of vegan doughnuts on a high street near you.
Here's the full story on the Greggs revelation that it is working on even more vegan products:
Related: Greggs to develop vegan versions of all its bestselling foods
12.27pm BST
But here is a good illustration of the challenge facing Powell as he tries to balance supporting the economy with his desire not to raise rates prematurely: a strong suggestion that China is intending to retaliate to US tariffs.
China will "take further countermeasures" in the trade war, including retailiatory tariffs, after the US imposed levies on goods worth $300bn, according to Hu Xijin, the editor of China's Global Times, a state-controlled newspaper.
China has ammunition to fight back. The US side will feel the pain.
Based on what I know, China will take further countermeasures in response to US tariffs on $300 billion Chinese goods. Beijing will soon unveil a plan of imposing retaliatory tariffs on certain US products. China has ammunition to fight back. The US side will feel the pain.
12.26pm BST
There has also been some hawkish language from US rate-setters, which might suggest the Federal Reserve does not want to cut rates too quickly.
More from Deutsche Bank:
Fed officials already descended on Jackson Hole yesterday, and we got an interesting trickle of comments from some regional presidents. Overall, the tone was on the hawkish side of expectations.
Kansas City's George said that she is not ready to provide more policy accommodation, Dallas's Kaplan said "I'd like to avoid having to take further action," and Philadelphia's Harker said "I think we should stay here for a while and see how things play out." And yes, he was talking about interest rates, not the beautiful resort in Wyoming.
12.17pm BST
Markets were this morning pricing in 57 basis points (0.5 percentage points) of cuts this year and another 47bps in 2020, meaning Powell has a high bar for markets to read a dovish message into today's comments.
The last month has seen new trade war tensions, global growth slowdown fears and further steep drops in bond yields, so Powell's speech "couldn't come soon enough", said analysts at Deutsche Bank led by Craig Nicol.
The immediate focus of Powell's speech will likely be whether he affirms that the current easing is a 'mid-cycle adjustment' as per the FOMC minutes or align more closely to market pricing.
If Powell sticks to the old language, as is most likely, it would affirm that he is still confident that the strength of consumption, in combination with modest Fed easing, will be sufficient to keep the recovery broadly on track.
12.10pm BST
So what will Powell do?
We think he will likely stick with this theme, but highlight increased concern over the global economic outlook and the potential impact this could have on the US economy going forward.
Even though we expect a dovish overall message from Chair Powell, it will likely fall short of the capitulation demanded by the market and US President Trump. The dollar will likely be supported on the back of this.
12.04pm BST
As we approach midday in London, stock markets remain on the rise across Europe, with investors awaiting Federal Reserve chairman Jerome Powell in three hours' time.
The FTSE 100 is up by 0.6%, while the FTSE 250 increased by 0.9%. The Stoxx 600 has also risen by 0.4%, but shed some of its earlier gains.
11.42am BST
While central bankers are meeting at Jackson Hole, the leaders of the world's largest advanced economies have their own shindig: the G7 summit in Biarritz, in the south of France.
Prime Minister Boris Johnson is there. Brexit is predictably on the agenda, for the British at least. You can follow the twists and turns today on the politics live blog.
Related: Amazon rainforest fires: global leaders urged to divert Brazil from 'suicide' path
11.20am BST
Huawei, the Chinese tech giant at the heart of the geopolitical dispute with the US, said on Friday its business has been less impacted by trade restrictions than initially feared.
It seems it's going to be a little less than that. But you have to wait till our results in March.
10.50am BST
Greggs is planning to roll out more vegan products, after the stunning marketing success of its vegan sausage roll.
We are working away at trying to see if we can come up with a vegan version of all our top-selling lines. Obviously people want a vegan option.
If we can succeed in doing that and produce something that tastes just as good as the meat version, then that will sell very successfully. That's what's been shown with the vegan sausage roll.
10.40am BST
RBS and Santander may be smarting from the competition regulator's telling off this morning, but in a neat one-two punch the Financial Conduct Authority (FCA) has now criticised the claims management companies (CMCs) who have profited so immensely from the PPI scandal.
The FCA on Friday said it has "found widespread poor-practice in CMCs" using misleading adverts.
9.54am BST
After something of a flurry of company news (particularly for a Friday in late August), here's a round-up of markets.
The FTSE 100 is up by 0.7% to 7,180 points, boosted by the weaker pound. The mid-cap FTSE 250 is up by about 1% - boosted by Peppa Pig owner Entertainment One.
9.24am BST
And news from Harland and Wolff, the shipbuilder whose yellow cranes dominate the Belfast skyline: administrators have extended a temporary lay-off period to give more time to find a buyer.
This has resulted in a number of non-binding offers for the business, assets & employees on a going concern basis. There are also other interested parties who are in constructive discussions with the administrators which may result in further offers.
9.18am BST
An update from Ryanair, whose pilots are currently striking over pay and conditions: flights from British airports are operating as usual today, with no disruption to its schedule expected.
A judge rejected an application on Wednesday for an injunction against the British Airline Pilots' Association (Balpa), which would have forced pilots to return to work.
9.12am BST
Hong Kong is gripped by protests and the backlash by government, and the airport will likely be disrupted again this weekend - raising concerns of a recession hitting the city.
Related: Hong Kong businesses fear protests will push economy into recession
8.48am BST
Hasbro, the US toymaker behind My Little Pony and Play-Doh, has snapped up the Peppa Pig owner Entertainment One in a 3.3bn takeover.
Related: Hasbro buys Peppa Pig owner Entertainment One in 3.3bn deal
8.41am BST
Here's a chart that tells a story: shares in Woodford Patient Capital Trust since 2015.
8.35am BST
If you take a look at the list of troubled Eddie Stobart Logistics' biggest shareholders, one stands out: Woodford Investment Management.
The valuation adjustment reflects a reassessment of the current progress of the business.
8.13am BST
Sterling went on a bit of a tear yesterday as Angela Merkel, the German chancellor, appeared to strike an emollient Brexit tone. It gained 1% yesterday, but is back down 0.4% today.
France's Emmanuel Macron perhaps reminded traders last night that, to coin a phrase, nothing has changed on the UK's departure from the EU so far.
8.07am BST
The FTSE 100 is up by 0.5% in early trading - in part thanks to the weakness of the pound, which has lost 0.4% this morning against the US dollar.
Germany's Dax and France's Cac 40 indices are both up by 0.5% as well.
8.01am BST
Eddie Stobart Logistics has said chief executive Alex Laffey will step down immediately as the company applied to suspend its shares from trading after it failed to publish its half-year results in time.
While revenue expectations for the first half are broadly in line with previous guidance, the full impact of these items on adjusted EBIT is unclear, but it is likely to be significantly lower than anticipated at the time of the half year trading update on 9 July 2019.
7.43am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The UK's competition regulator has ordered Royal Bank of Scotland and Santander to appoint an independent body to audit their PPI processes after they failed to tell thousands of customers about their policies.
Top 10 retail banking scandals. Top is #PPI at a cost to the banks and building societies of 48.5 bn so far - https://t.co/kBRFePZ0qI
It is unacceptable that some banks aren't providing PPI reminders - or are sending inaccurate ones - eight years after our order came into force. The legally binding directions we've issued today will make sure that both RBS and Santander now play by the rules.
These are serious issues that, in the future, may result in fines if the government gives us the powers we've asked for.
We're also requiring RBS and Santander to appoint an independent body to audit their PPI processes to make sure they are fully compliant.
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