Economy

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BRASILIA (Reuters) – Diplomats from the Group of 20 major economies struggled on Saturday to overcome differences on paying to tackle climate change, taxing the super rich and addressing the Ukraine war as they negotiated a joint statement before their leaders’ summit.The G20 summit in Rio de Janeiro on Monday and Tuesday comes as the United Nations COP29 climate talks enter their second week, with negotiators debating a new goal for how much money richer nations will cough up to confront climate change. U.N. officials and other delegates in Baku expressed hopes that a strong message from the G20 leaders could help provide political momentum for a COP29 deal on climate finance.    However, four diplomats involved in the talks in Rio said they were at a familiar impasse: developed nations want some of the wealthier developing countries to contribute financing to tackle global warming, but the developing world says it is up to the world’s wealthiest nations to foot the bill.Reaching a global accord may only get tougher with the return to power of U.S. president-elect Donald Trump, who is preparing to again pull the United States out of the Paris climate accord.Addressing the Russian invasion of Ukraine has also been a prickly issue for the G20 since 2022, and the war in Gaza has added to the group’s geopolitical divisions.G20 sherpas leading the talks in Rio have tried to avoid discussing the wars in advance meetings all year. Now diplomats say they plan to limit any text to a general paragraph based on U.N. principles and the need to respect peace, followed by a paragraph on Ukraine and another on Palestine.The taxation of large fortunes, a proposal dear to President Luiz Inacio Lula da Silva, host of the G20 summit, has also hit a stumbling block.In a last minute change of mind, Argentina refused to sign off on the inclusion of the proposal in the final communique.Argentina’s strong opposition to taxing the super-rich came after its right-wing libertarian President Javier Milei visited Trump at his Mar-a-Lago resort in Florida, making him the first foreign leader to visit the U.S. president-elect.Sources involved in G20 talks said Argentine negotiators, at Milei’s request, now seek to remove mention of taxing the most wealthy, which might only enter the communique with a note reflecting that it was not backed by Argentina. More

LIMA (Reuters) -With Donald Trump’s imminent return to the U.S. presidency looming over the Asia-Pacific Economic Cooperation (APEC) summit in Lima, Chinese President Xi Jinping said on Friday that unilateralism and protectionism needed to be rejected in favour of economic globalization.Xi’s critique of protectionism at APEC offers a preview of how China will seek to position itself once Trump takes office in January. Trump has pledged to impose tariffs on Chinese imports in excess of 60% but Beijing and Chinese companies are hoping that his protectionist policies will also irk U.S. allies in Europe and Asia – giving China an opening to increase its global influence and improve trade ties.In a speech read out to business executives by Chinese commerce minister Wang Wentao on Friday at the APEC CEO Summit, Xi said that economic globalization was facing “countercurrents,” without specifying any particular country or leader.”The world has entered a new period of turmoil and change, unilateralism and protectionism are spreading, the fragmentation of the world economy has intensified,” Xi said.”Hindering economic cooperation under various pretexts, insisting on isolating the interdependent world, is reversing the course of history,” he added.Xi listed a series of recent measures the Chinese government has taken to attract foreign investment, including increasing the number of Chinese industries that can receive foreign investment, as well as unilateral visa exemptions to foreigners visiting China.”China will implement more independent and unilateral opening-up policies, expand the network of high-standard free trade zones facing the world, and open even further the door into China,” said the Chinese leader, who is due to meet U.S. President Joe Biden on Saturday in Peru.However, some analysts said that China’s pitch as an alternative or counterbalance to a protectionist Trump-led United States has lost its shine compared to 2016, when Trump was first elected. Ja Ian Chong, a political scientist at National University of Singapore, said that unlike 2016, there were now widespread concerns in the international community about how Chinese state subsidies to industrial sectors and their resulting overcapacity negatively affect other countries’ economies. “China is as protectionist as the U.S. might be, its economy is far less open today than it used to be,” Chong said.BUSINESS PITCHXi was accompanied by hundreds of Chinese business executives on his trip to Peru, as Beijing seeks to significantly expand trade ties with resource-rich Latin America. Several business leaders at the APEC CEO Summit, running alongside the main event, said the Asian presence this year outweighed that of the U.S., Canada and Australia, with the Mexicans notably absent. One Peruvian businessman quipped how the Chinese “vastly outnumbered” everyone else, motivated by the official visit of President Xi. “The only Americans we saw were those sponsoring like Google (NASDAQ:GOOGL),” he said.Several Chinese executives Reuters spoke to said the state visit and the inauguration of a Beijing-backed megaport project were a big incentive: “Most businesses like mine in logistics came because the President is here,” said one businessman who had travelled from Shanghai to Lima. “We get a lot of second hand information, being here in Peru makes a difference,” he added.Preliminary plans to build an e-commerce distribution center in Chancay to house merchandise from China were discussed on sidelines of the Asia-Pacific Economic Cooperation CEO Summit on Friday, two Peruvian delegates said. The proposal would transport goods from over 75,000 shops in southern China’s Yiwu, an export hub, to the Pacific port that is expected increase trade between Asia and South America. More

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Addressing a Welsh Labour Conference in Llandudno, north Wales, Starmer did not refer directly to the farmers’ complaints, but he said he stood by the decisions made in finance minister Rachel Reeves’ Oct. 30 budget statement.”Make no mistake, I will defend our decisions in the budget all day long,” he said.”I will defend facing up to the harsh light of fiscal reality, I will defend the tough decisions that were necessary to stabilise our economy.”While Starmer spoke, hundreds of farmers protested outside the conference venue over a budget measure that will mean more of them having to pay inheritance tax. Their protest included a convoy of tractors.Farmers have warned that the move will threaten the viability of farms, force them to sell land, make produce more expensive and threaten food security.One of the protesting farmers, Gareth Wyn Jones, told Sky News that Starmer had angered the farmers further by not speaking to them after his speech.”It’s so frustrating that he’s run out the back door like a flippin’ rat, people here have come here to talk to him,” he said.Farmers plan a major protest in London on Nov. 19.UK businesses have also warned that increased employment taxes and a rise in the minimum wage from the budget will stoke inflation and have a negative impact on investment and jobs. More

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Speaking to BBC radio, Stephen Moore said the EU had a “socialist model” and suggested the U.S. would be less interested in a free trade deal with Britain if the government put its economic relations with the EU ahead of those with the U.S.“The UK is kind of caught in the middle of these two forms of economic model and I believe that Britain would be better off moving towards more of the American model of economic freedom. And if that were the case, I think it would spur the Trump administration’s willingness to do the free trade agreement with the UK,” said Moore.Bank of England Governor Andrew Bailey on Thursday urged Britain’s new Labour government to rebuild ties with the EU.While the government has ruled out rejoining the EU’s single market or customs union, Prime Minister Keir Starmer has said he wants to improve trade ties and diplomatic relations with the bloc.Finance minister Rachel Reeves, speaking just before Bailey at the same event, said Britain needed to “reset” its relationship with the EU, and that she also looked forward to working closely with Trump to strengthen trade ties.While Bailey did not refer directly to the U.S. election in his speech, policymakers around the world are still digesting Trump’s victory and the prospect of double-digit tariffs on goods imported by the United States. More

Although he acknowledged that Trump’s plans to slash taxes and impose harsh tariffs on US imports will be considered, Powell flagged that it could take some time before officials have enough clarity to gauge the impact of these policy changes on their calibration of interest rates.In order to gauge how officials may assess the election outcome at their final gathering of the year next month, analysts at Deutsche Bank (ETR:DBKGn) led by Matthew Luzzetti scoured through the minutes of the meeting of the rate-setting Federal Open Market Committee in December 2016 — one month after Trump was first elected to the White House.They said that meeting had a “number of parallels to this year, with President Trump set to take the White House and promising dramatic shifts in the economic policy landscape.”The December 2016 meeting had a clear focus on fiscal policies, the analysts said, with the Fed largely anticipating a more expansionary stance at the time. Although there was significant uncertainty around the “timing and form” of fiscal and trade policies, they noted that “about half” of Fed officials began factoring in these changes to their baseline rate outlooks. Almost all, meanwhile, said the risks tilted towards stronger growth and “many” saw this as “potentially necessitating somewhat tighter monetary policy than currently anticipated.”Some economists have speculated that Trump’s proposals, especially the blanket import levies, could drive up inflation and lead the Fed to leave rates at a higher level than initially anticipated. This uptick in volatility may exacerbate the possibility of a clash between the Fed and the new Trump administration, the Wall Street Journal said.Last week, Powell flatly rejected notions that Trump could dismiss him from his post, telling reporters that he would not resign if asked to by the upcoming administration. Powell would also likely lodge a legal challenge to any attempt to oust him before his term comes to a close, the WSJ reported.For his part, Trump has not recently indicated any plans to try to force out Powell, saying in June that he would allow Powell to serve out the remainder of his term “especially if I thought he was doing the right thing.” Trump’s advisers are split on how far he should take the matter, the WSJ said.Meanwhile, any alterations in the makeup of the Fed may threaten to disrupt an ongoing bid by policymakers to defeat inflation without sparking a meltdown in the wider economy or labor demand. The Fed has described economic activity as on a “solid pace.” More