Week of July 8, 2024 Newsletter

??THIS WEEK: Healthcare, Climate Action, Supply Chains, Artificial Intelligence, Sustainability, Trade

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Trade Update

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Infographic of The Week

HAPPENING THIS WEEK

Monday, July 8

• EU: Political groups will prepare for the constitutive session of Parliament's tenth legislative term, which will take place on 16-19 July in Strasbourg. (Strasbourg, France)
• EU: Informal meeting of competitiveness ministers. (Budapest, Hungary)
• India: India's Prime Minister Modi visits Russia for a two-day visit.
• South Korea: The biggest labor union of Samsung Electronics is set to begin a three-day strike demanding higher pay and changes to bonus policies. (Hwaseong, South Korea)
• Canada: 46th Meeting of the Montreal Protocol OEWG. (Montreal)
• USA: High-level Political Forum on Sustainable Development (HLPF) 2024. (New York City)

Tuesday, July 9

• Hungary: Informal meeting of European Union competitiveness ministers. (Budapest, Hungary)
• USA: House Committee on Appropriations: Markup of Fiscal Year 2025 bills for Commerce, Justice, Science, and Related Agencies; Interior, Environment, and Related Agencies; and Energy and Water Development and Related Agencies. (Washington, D.C.)
• USA: Senate Committee on the Budget: Hearings to examine Congressional Budget Office's updated 2024-2034 budget and economic outlook. (Washington, D.C.)
• Philippines: Philippine and Japanese foreign ministers hold "two-plus-two" talks in Manila to bolster strategic partnership. (Manila, Philippines)

Wednesday, July 10

• EU: ACER-JRC webinar on ensuring sufficient grid capacity for electricity trade. (Online)
• USA: House Committee on Oversight and Accountability: Hearing on “Oversight of the U.S. Environmental Protection Agency.” (Washington, D.C.)
• USA: Senate Committee on Environment and Public Works: Hearings on the state and federal response to the Francis Scott Key Bridge collapse on March 26, 2024. (Washington, D.C.)

Thursday, July 11

• EU: Conference on "Mediterranean and Atlantic Ocean Health and Coastal Resilience - EU Mission Restore our Ocean and Waters by 2030." (EU Missions)
• USA: Seventh Local and Regional Governments Forum on the 2030 Agenda. (New York City, USA)
• USA: Senate Committee on Commerce, Science, and Transportation: Hearings on the need to protect Americans' privacy and the AI Accelerant. (Washington, D.C.)

Friday, July 12

• China: Trade statistics provide a gauge of the country's commercial exports. (China)
• USA: House Committee on Ways and Means: Field hearing on "Access to Health Care in America: Unleashing Medical Innovation and Economic Prosperity." (USA)

Saturday July 13 and Sunday July 14

• Quiet weekend in politics.

GLOBAL ECONOMIC PULSE

USA

The United States will see updated Consumer Price Index (CPI) data, potentially revealing further progress in the Federal Reserve's fight against inflation. Early Purchasing Managers' Index (PMI) releases suggest easing output price inflation. The consensus is for a modest 0.1% monthly rise in CPI, bringing the annual rate down to 3.1%. Federal Reserve Chair Jerome Powell's testimony to the Senate Banking Committee will be closely monitored for monetary policy insights. Producer Price Index (PPI) data and the University of Michigan's sentiment index are also due.

Europe

The United Kingdom will release its Gross Domestic Product (GDP) data for May, following slower growth indicated by recent PMIs. The Bank of England will watch these developments alongside updated recruitment industry survey data. Germany will publish its trade and inflation data for May, providing further insights into the economic health of the Eurozone's largest economy.

Asia

China is set to release its June credit, inflation, and trade data. Consumer Price Index (CPI) and Producer Price Index (PPI) are expected to show modest inflation increases. Export growth is forecasted to rise to 9.5% year-on-year, while credit activity remains sluggish despite a potential end-of-quarter spike. Japan's Labour Cash Earnings for May will reflect recent wage negotiations, potentially influencing Bank of Japan (BoJ)'s rate decisions. India's inflation is expected to remain stable, with the Reserve Bank of India considering potential easing in the third quarter. Korea's Bank of Korea (BoK) meeting will focus on inflation trends, with rate cuts likely delayed until October. Australia's household spending data for June will clarify second-quarter consumer spending trends. Singapore's advance GDP estimate for the second quarter is expected to show slight growth improvements.

Latin America

Mexico will publish its June inflation and consumer confidence data. Industrial production figures for May will also be released. Brazil's inflation and retail sales data will be key economic indicators, alongside business confidence readings.

Africa

South Africa’s rand gained against a weaker dollar, driven by expectations of Federal Reserve rate cuts later this year. Kenya Markets: The Kenyan shilling remained stable as anti-government protests eased. Kenya Budget: President William Ruto proposed spending cuts and additional borrowing to address a $2.7 billion budget deficit, avoiding planned tax hikes amid protests. Rwanda South Korea Funding: Rwanda received $1 billion in concessionary loans from South Korea for projects in transport, healthcare, and education. Zambia Mining: Vedanta Resources Ltd secured financing to repay creditors and revive Konkola Copper Mines.

WEEKLY EXECUTIVE BRIEF

Trade Update

Weekly Trade Update

In June 2024, Brazil amended its List of Exceptions to the Common External Tariff (LETEC) to eliminate import duties on specific medicines and medical products. Germany received European Commission approval for a EUR 3 billion state aid scheme supporting the Hydrogen Core Network. Japan secured a USD 32 million loan agreement with PT Mitsubishi Motors Krama Yudha Indonesia. Australia's CEFC funded AUD 127.5 million towards TagEnergy's Golden Plains Wind Farm. China incentivized local semiconductor procurement in the automotive industry. South Africa launched a Medical Technology Master Plan. The Republic of Korea’s K-Sure provided up to USD 1 billion for PetroVietnam projects. The United Kingdom announced funding for wind turbine development. China adjusted the minimum purchase price of rice in March 2024 and initiated an antidumping investigation on EU pork imports in June 2024. The Swiss Federal Office for Agriculture announced import tariff-rate quotas for processing potatoes until July 2024. Argentina eliminated mandatory export registration for 40 agricultural products in June 2024. Denmark's EIF signed portfolio guarantee agreements with kompasbank in July 2024. The EU revised import duties on agricultural and industrial products and adopted the Net-Zero Industry Act in June 2024. India increased minimum support prices for monsoon crops and launched a green hydrogen testing facility scheme in July 2024. Mexico updated tax credits under the fuel subsidy scheme in June 2024. Peru modified import duties on sugar, rice, and dairy products in June 2024. The US Department of Transportation funded infrastructure projects in Pennsylvania and Washington in June 2024.

Biweekly China Spotlight

China’s Ministry of Commerce (MOFCOM) reported China foreign trade growth in May, with an 8.6% increase in imports and exports, particularly a 11.2% rise in exports. Significant contributions came from consumer electronics, homeware, and high-value mechanical and electrical products.

Significant boosts in regional trade and investment have been observed since the implementation of the Regional Comprehensive Economic Partnership (RCEP). Plans to enhance RCEP benefits through active involvement and supportive measures for enterprises are being made.

Pilot programs for modern commercial distribution systems in 20 cities have been launched by MOFCOM, aiming to improve urban-rural distribution networks, enhance supply chain resilience, and support the digital transformation of traditional wholesalers and retailers.

Preparations for the 7th China International Import Expo (CIIE) are underway, with over a thousand exhibitors registered and efforts to ensure high standards are met. Comprehensive support for participants is being provided.

Progress in resolving trade issues with Australia has been highlighted, with aims for deeper bilateral cooperation.

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