<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107433735-1719423521960-gettyimages-2159383303-jr029067_kd08rrou-820x462.jpeg" alt="" class="wp-image-514095" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107433735-1719423521960-gettyimages-2159383303-jr029067_kd08rrou-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107433735-1719423521960-gettyimages-2159383303-jr029067_kd08rrou-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107433735-1719423521960-gettyimages-2159383303-jr029067_kd08rrou-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107433735-1719423521960-gettyimages-2159383303-jr029067_kd08rrou-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107433735-1719423521960-gettyimages-2159383303-jr029067_kd08rrou.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">People line up as they wait for the JobNewsUSA.com South Florida Job Fair to open at the Amerant Bank Arena on June 26, 2024, in Sunrise, Florida.  Joe Raedle | Getty Images</figcaption></figure>



The U.S. labor market may have cooled some in July, as a gradual slowdown in the economy and Hurricane Beryl are expected to have taken some of the steam out of hiring.



Still, even if the Labor Department’s nonfarm payrolls report for July, to be released Friday at 8:30 a.m. ET, does indicate a weaker jobs picture, the decline is expected to be only incremental and in keeping with the type of gentle downshift the Federal Reserve is looking to engineer.



“If the Fed was going to manufacture the soft landing, this is probably what it was going to look like,” said Mike Reynolds, vice president of investment strategy at Glenmede. “You’re seeing just modest on-the-margin weakness in the labor market that [isn’t likely to] spiral out of control into a negative feedback loop.”



Indeed, the report from the department’s Bureau of Labor Statistics is forecast to show payroll gains of 185,000 on the month, down from 206,000 in June, with the unemployment rate holding at 4.1%, according to the Dow Jones consensus estimate. Job reports for the past year and a half have routinely beaten the consensus.



But some economists think the report could be on the light side; Goldman Sachs expects Beryl, which ravaged large parts of Texas, particularly Houston, to pull down the jobs number by 15,000. The firm thinks the total payroll gain will be more like 165,000. Citigroup projects an even lower number — 150,000 on payrolls and a tick higher in the unemployment rate to 4.2%.



Should the unemployment rate keep climbing, it could raise fears that the so-called Sahm Rule is in danger of being triggered. The rule has observed without fail that when the unemployment rate over a three-month period averages half a percentage point higher than the 12-month low, the economy is in recession. A year ago, the jobless level as at 3.5% before it started climbing.



<h2 class="wp-block-heading" id="h-optimism-at-the-fed">Optimism at the Fed</h2>



Job gains have averaged 203,000 a month for the first half of 2024, while the unemployment rate has drifted higher as more workers have come into the labor force and the level of those considered unemployed but looking for work or temporarily laid off has hit its highest level since October 2021.



Fed Chair Jerome Powell on Wednesday noted that the previous disparity between supply and demand in the labor market has come into near-balance. Open jobs now outnumber available workers just 1.2 to 1, down from 2 to 1 a few years ago as inflation roared.



Should the factors continue to come into balance and other inflation indicators show progress, Powell strongly hinted that an interest rate cut could be coming in September.



“Our confidence is growing, because we’re getting good data,” he said at a news conference following the Fed’s policy meeting. “Frankly, the softening in the labor market conditions gives you more confidence that the economy’s not overheating.”



Markets will be watching Friday’s numbers for confirmation that Powell’s view on the labor market is accurate — and that the Fed isn’t overconfident and waiting too long to start lowering rates.



There has been a growing chorus on Wall Street for the Fed to start easing now that most indicators show that the inflation rate is only a short distance from the central bank’s 2% goal. DoubleLine CEO Jeffrey Gundlach, for instance, told CNBC on Wednesday that he thinks the economy already is teetering on recession.



“When we look back at today, …. I kind of believe that we will say that we were in recession in September 2024,” he said.



<h2 class="wp-block-heading"><a></a>Eyes on earnings</h2>



The Fed at its meeting voted to hold its benchmark overnight borrowing rate in a range of 5.25%-5.5%, where it has been for the past year.



Markets rallied on the news but gave back those gains Thursday following news that unemployment claims rose last week and the manufacturing sector slumped further into contraction.



“By holding off on cutting interest rates today, the Federal Open Market Committee is betting the labor market is strong enough to wait until the fall for confirmation that inflation is returning to 2%,” said Nick Bunker, Indeed Hiring Lab’s economic research director for North America. “Let’s hope it pays off.”



As always, markets also will have eyes on the average hourly earnings portion of the report for signs of underlying inflation.



The forecast is that earnings rose 0.3% on the month and 3.7% from year ago. If the latter is correct, it will represent the lowest earnings increase since May 2021.



“Even if wage pressures were to unexpectedly remain ‘stuck’ or slightly re-accelerate in this report, we think that the progress the Fed has made on inflation thus far means that there should still be an opportunity for the Fed to cut rates in September so long as subsequent data releases (eg July CPI) cooperates,” said BeiChen Lin, investment strategist at Russell Investments.

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Here’s everything you need to know about Friday’s big jobs report

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-820x547.jpeg" alt="" class="wp-image-513752" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107375514-1708434236970-gettyimages-1985552002-20240207_bank_of_england_010-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Blurred buses pass the Bank of England in the City of London on 7th February 2024 in London, United Kingdom.  Mike Kemp | In Pictures | Getty Images</figcaption></figure>



LONDON — Several analysts expect the Bank of England to announce an interest rate cut on Thursday, but a lack of clear signaling from the central bank has shrouded the decision in uncertainty.



Markets were pricing in a 61% probability of a 25-basis-point reduction of its key rate at the August meeting as of 8:15 a.m. in London, despite U.K. inflation hitting the BOE’s 2% target for two straight months.



The Bank Rate has been held at a 16-year high of 5.25% since August 2023.



The BOE typically provides less forward guidance than some other central banks, but the Thursday decision is viewed as an especially close call, given the recent six-week period in which its communications were restricted because of the U.K. general election.



While recent breakdowns have seen two votes for a rate cut and seven for a hold, some of the BOE’s more hawkish policymakers have been vocal about their concerns over wage growth and sticky services inflation.



The decision will be announced at midday U.K. time and will be followed by a press conference. Thursday will also see the release of the quarterly Monetary Policy Report, which will contain economic growth and inflation projections.



This is a developing story&#8230;

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Bank of England to make knife-edge call on interest rates as markets favor cut

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="929" height="523" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107430690-1718744144150-gettyimages-1661425000-101_0193_gi.jpeg" alt="" class="wp-image-512927" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107430690-1718744144150-gettyimages-1661425000-101_0193_gi.jpeg 929w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107430690-1718744144150-gettyimages-1661425000-101_0193_gi-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107430690-1718744144150-gettyimages-1661425000-101_0193_gi-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107430690-1718744144150-gettyimages-1661425000-101_0193_gi-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107430690-1718744144150-gettyimages-1661425000-101_0193_gi-768x432.jpeg 768w" sizes="auto, (max-width: 929px) 100vw, 929px" /><figcaption class="wp-element-caption">Aerial view of cityscape and skyscraper at sunset in Dubai Marina. Lu Shaoji | Moment | Getty Images</figcaption></figure>



The United Arab Emirates is on track to be the world’s top wealth magnet for the third year running, according to the Henley Private Wealth Migration Report.



At the same time, the U.K. – already the source of many of the UAE’s expatriates – is projected to see its millionaire population drop by 17% by 2028, according to Swiss bank UBS.



High-net worth individuals are in many cases voting with their feet, seeking greener pastures – or in the case of tax-free expat hubs like Dubai, sandier beaches – as costs and taxes rise in their home country. The trend is likely to accelerate in the wake of the landslide election victory for the U.K.’s Labour Party in June, according to some financiers.



“There are push and pull factors for this trend of millionaires opting to relocate to Dubai,” Karim Jetha, a longtime regional investor who relocated to the UAE from the U.K. during the pandemic, told CNBC.



“Push factors include the prospect of higher taxes under a new Labour government. For example, one of Labour’s campaign pledges was to levy VAT on private school tuition, which would raise the cost by 20%,” he said. “Pull factors include Dubai’s perception of being extremely safe and visa reforms that encourage migration.”



The UAE is set to see a record net inflow of 6,700 millionaires from around the world by the end of 2024, according to the Henley report, which was released in June. That’s nearly double the second-ranked country on the list, the U.S., which is expected to welcome a net inflow of 3,800 millionaires in the same time frame.&nbsp;



“With its zero income tax, golden visas, luxury lifestyle, and strategic location, the UAE has entrenched itself as the world’s number one destination for migrating millionaires,” the report said. The UAE’s golden visa is a long-term residence visa that allows foreign residents to live, work or study in the UAE.



While the millionaires migrating to the UAE most commonly come from India, the wider Middle East, Russia, and Africa, a larger number of Brits and Europeans are expected to move to the glitzy desert emirate as well, it added.&nbsp;



Development and reforms in the UAE’s “wealth management ecosystem” are to thank for much of this, said Sunita Singh-Dalal, partner at the Hourani Private Wealth &amp; Family Offices in Dubai.&nbsp;



“In less than five years, the UAE has introduced a robust regulatory framework that provides the wealthy with a range of innovative solutions to protect, preserve and enhance their wealth,” she said.&nbsp;



Factors such as modern infrastructure and a robust international school system, geographical connectivity, low crime, no income tax, the remote worker visa and a number of investment incentives also help attract the wealthy to Dubai.&nbsp;&nbsp;



Britain, by contrast, is set to see its millionaire population drop from 3,061,553 last year to 2,542,464 by 2028, the UBS Global Wealth Report, which came out in June, forecast. But it’s important to note that the U.K.’s large millionaire population – the third-highest in the world – includes many foreign residents from places like Russia, the Middle East and elsewhere.



Now that the U.K. government is phasing out its “non-dom” status – which allowed wealthy and often foreign residents not to pay British taxes on overseas income – much of that population will be looking to drop their U.K. residencies.



“The outflow already generated by the economic and political turmoil in Britain risks being accelerated by further unwelcome policy decisions,” Hannah White, director of the independent think tank the Institute for Government in London, commented in the Henley report.&nbsp;



She pointed to the 40% duty already in effect on estates above a threshold of £325,000 ($417,755), as well as the ending of the UK’s non-dom tax regime starting in 2025.&nbsp;



The current Labour government has also pledged to drop the exemption for a 20% VAT charge on Britain’s private school tuition fees, which would make education significantly more expensive for those sending their children to the elite institutions.&nbsp;



“Labour’s commitment to remove their exemption from 20% VAT is a further unwelcome development,” White said.&nbsp;

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Dubai set to welcome even more millionaires as wealthy individuals abandon the UK

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="405" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107427541-1718145095655-gettyimages-2157186260-img_9260_rfb2tx0a.jpeg" alt="" class="wp-image-512447" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107427541-1718145095655-gettyimages-2157186260-img_9260_rfb2tx0a.jpeg 720w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107427541-1718145095655-gettyimages-2157186260-img_9260_rfb2tx0a-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107427541-1718145095655-gettyimages-2157186260-img_9260_rfb2tx0a-160x90.jpeg 160w" sizes="auto, (max-width: 720px) 100vw, 720px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



An important gauge for the Federal Reserve showed inflation eased slightly from a year ago in June, helping to open the way for a widely anticipated September interest rate cut.



The personal consumption expenditures price index increased 0.1% on the month and was up 2.5% from a year ago, in line with Dow Jones estimates, the Commerce Department reported Friday. The year-over-year gain in May was 2.6%, while the monthly measure was unchanged.



Fed officials use the PCE measure as their main baseline to gauge inflation, which continues to run above the central bank’s 2% long-range target.



Core inflation, which excludes food and energy, showed a monthly increase of 0.2% and 2.6% on the year, both also in line with expectations. Policymakers focus even more on core as a better gauge of longer-run trends as gas and groceries costs tend to fluctuate more than other items.



Stock market futures indicated a positive open on Wall Street following the release while Treasury yields moved lower. Futures markets price in a more aggressive path for Fed interest rate cuts.



“A two-word summary of the report is, ‘good enough,’” said Robert Frick, corporate economist with Navy Federal Credit Union. “Spending is good enough to maintain the expansion, and income is good enough to maintain spending, and the level of PCE inflation is good enough to make the decision to cut rates easy for the Fed.”



Goods prices fell 0.2% on the month while services increased 0.2%. Housing-related prices in June rose 0.3%, a slight deceleration from the 0.4% increase in each of the last three months and the smallest monthly gain going back at least to January 2023.



The report also indicated that personal income rose just 0.2%, below the 0.4% estimate. Spending increased 0.3%, meeting the forecast.



As spending held relatively strong, the savings rate decreased to 3.4%, hitting its lowest level since November 2022.



The report comes with markets paying close attention to which way the Fed is headed on monetary policy.



There’s little expectation that the rate-setting Federal Open Market Committee will make any moves at its policy meeting next Tuesday and Wednesday. However, market pricing is pointing strongly to a rate cut at the September meeting, which would be the first reduction since the early days of the Covid pandemic.



“Overall, it’s been a good week for the Fed. The economy appears to be on solid ground, and PCE inflation essentially remained steady,” said Chris Larkin, managing director of trading and investing at E-Trade Morgan Stanley. “But a rate cut next week remains a longshot. And while there’s plenty of time for the economic picture to change before the September FOMC meeting, the numbers have been trending in the Fed’s direction.”



As inflation rose to its highest level in more than 40 years in mid-2022, the Fed embarked on a series of aggressive hikes that took its benchmark borrowing rate to its highest level in some 23 years. However, the Fed has been on pause for the past year as it evaluates fluctuating data that earlier this year showed a resurgence in inflation but lately has displayed a gradual cooling that has many policymakers discussing the likelihood of at least one cut this year.



Futures markets have priced in about a 90% chance of a September reduction followed by cuts at both the November and December FOMC meetings, according to the CME Group’s FedWatch measure.



Fed officials, though, have been cautious in their remarks and have stressed that there is no set policy path, with data guiding the way.

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Fed’s key inflation gauge rose 2.5% in June from a year ago, easing path to rate cut

<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="1920" height="1080" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108004882-1720728328098-gettyimages-2161665996-economy451659_szz6uf7k.jpeg" alt="" class="wp-image-511374" style="width:840px;height:auto" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108004882-1720728328098-gettyimages-2161665996-economy451659_szz6uf7k.jpeg 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108004882-1720728328098-gettyimages-2161665996-economy451659_szz6uf7k-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108004882-1720728328098-gettyimages-2161665996-economy451659_szz6uf7k-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108004882-1720728328098-gettyimages-2161665996-economy451659_szz6uf7k-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108004882-1720728328098-gettyimages-2161665996-economy451659_szz6uf7k-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108004882-1720728328098-gettyimages-2161665996-economy451659_szz6uf7k-1536x864.jpeg 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Economic activity in the U.S. was considerably stronger than expected during the second quarter, boosted by a strong consumer, government spending and a sizeable inventory build, according to an initial estimate Thursday from the Commerce Department.



Real gross domestic product, a measure of all the goods and services produced during the April-through-June period, increased at a 2.8% annualized pace adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for growth of 2.1% following a 1.4% rise in the first quarter.



Consumer spending helped propel the growth number higher, as did contributions from private inventory investment and nonresidential fixed investment, according to the first of three estimates the department will provide.



Personal consumption expenditures, the main proxy in the Bureau of Economic Analysis report for consumer activity, increased 2.3% for the quarter, up from the 1.5% acceleration in Q1. Both services and goods spending saw solid increases for the quarter.



Inventories also were a significant contributor, adding 0.82 percentage point to the total gain. Government spending added a tailwind as well, rising 3.9% at the federal level, including a 5.2% surge in defense outlays.



On the downside, imports, which subtract from GDP, jumped 6.9%, the biggest quarterly rise since Q1 of 2022. Exports were up just 2%.



Stock market futures drifted higher following the report while Treasury yields moved lower.



“The composition of growth was one of the better mixes that we have observed in some time,” said Joseph Brusuelas, chief economist at RSM. The report “tends to support the idea that the American economy is in the midst of a productivity boom which over the medium term will lift living standards across the country via lower inflation, low employment and rising real wages.”



There was some good news on the inflation front: the personal consumption expenditures price index, a key measure for the Federal Reserve, increased 2.6% for the quarter, down from the 3.4% move in Q1. Excluding food and energy, core PCE prices, which the Fed focuses on even more as a longer-term inflation indicator, were up 2.9%, compared to a 3.7% increase in the prior period.



The so-called chain-weighted price index, which takes into account changes in consumer behavior, increased 2.3% for the quarter, below the 2.6% estimate.



Treasury Secretary Janet Yellen saw the GDP report as “affirming the path we’re on to steady growth and declining inflation,” in remarks she delivered Thursday morning in Rio de Janeiro.



One other key variable, final sales to private domestic purchasers, which the Fed considers a good indicator of underlying demand, accelerated at a 2.6% pace, the same as in the prior quarter.



However, the report also indicated that the personal savings rate continues to decelerate, at 3.5% for the quarter, compared with 3.8% in Q1.



There have been signs of cracks lately in the consumer picture.



A report Wednesday from the Philadelphia Federal Reserve showed credit card delinquencies at an all-time high according to data going back to 2012. Revolving debt balances also reached a new high even as banks reported tightening credit standards and declining new card originations.



However, retail sales numbers have continued to climb indicating that consumers are weathering the headwinds of high interest rates and persistent inflation.



There also is pressure in the housing market: Sales are declining while home prices continue to rise, putting stress on first-time homebuyers.



Federal Reserve officials are expected to hold interest rates steady when they meet next week, though market pricing is pointing to the first cut in four years in September. Policymakers have been circumspect about when they might start reducing rates, though recent comments indicate more of a willingness to start easing policy and most central bankers have said they see further increases as unlikely.



In other economic news Thursday, the Labor Department reported that initial jobless claims totaled 235,000 for the week ended July 20, down 10,000 from the previous week and exactly in line with the Dow Jones forecast. Continuing claims, which run a week behind, edged lower to 1.85 million.



Also, orders for durable goods — generally big-ticket items such as aircraft, appliances and computers — unexpectedly fell 6.6% in June, compared with the forecast for a 0.3% increase. However, excluding transportation, new orders increased 0.5%.

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U.S. economy grew at a 2.8% pace in the second quarter, much more than expected

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2162833993-820x547.jpg" alt="" class="wp-image-510532" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2162833993-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2162833993-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2162833993-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2162833993-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2162833993-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2162833993-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">GRAND RAPIDS, MICHIGAN &#8211; JULY 20: Republican presidential nominee, former U.S. President Donald Trump walks offstage after speaking at a campaign rally at the Van Andel Arena on July 20, 2024 in Grand Rapids, Michigan. Trump&#8217;s campaign event is the first joint event with his recent vice presidential pick Sen. J.D. Vance (R-OH) and the first campaign rally since the attempted assassination attempt his rally in Butler, Pennsylvania. (Photo by Anna Moneymaker/Getty Images)</figcaption></figure>



Former President Donald Trump would likely take his trade war and economic decoupling policies to new levels if he were elected to a second term in the White House, experts told CNBC.



While Joe Biden also placed strategic competition with China at the forefront of his economic policy, economists and trade experts largely expect Trump would further cut and destabilize trade relations between the world’s two largest economies.



“A Trump victory is highly likely to increase trade and economic hostilities between the U.S. and China, ramping up the trade and financial decoupling between the two countries,” said Eswar Prasad, an economics professor at Cornell University.



Trump is widely expected to face incumbent Vice President Kamala Harris after Biden bowed out of the race and endorsed her. According to Prasad and other experts, Harris’ approach to China would likely be similar to that of Biden.



While Trump and Biden both took a protectionist stance, their strategies and tactics differed greatly, explained Prasad, who previously served as head of the International Monetary Fund’s China and financial studies divisions.



“Trump relied on tariffs to keep out imports from China. Biden — while keeping those tariffs in place and even increasing tariffs on certain imports — has focused more on restricting China’s access to technology transfers and computer chips,” he said.



<h2 class="wp-block-heading" id="h-tariff-man"><a></a>‘Tariff man’</h2>



Trump’s biggest diversion from Biden-era trade policy would likely be tariffs levied on China.



The self-proclaimed “tariff man” set off a trade war with Beijing during his first term. He placed a series of duties on $250 billion of Chinese imports, disregarding warnings the levies would raise prices and hurt consumers. 



After defeating Trump in 2020, Biden retained his predecessor’s tariffs and even added his own, announcing stiff new duties on about $18 billion worth of Chinese imports, including electric vehicles, solar cells, lithium batteries, steel and aluminum. 



Experts told CNBC they expect Harris to largely continue Biden’s tariff policy. Trump, on the other hand, has already proposed increasing rates on Chinese imports by at least 60%. 



“I certainly don’t know if Trump is willing to pursue such extreme measures, but I do believe that he’s likely to increase tariffs to some degree during a second term,” said Stephen Weymouth, a professor of international political economy at Georgetown University.&nbsp;&nbsp;



Economist Stephen Roach said Trump raising tariffs in a second term would be the “functional equivalent of the nuclear option” in international economic conflict.&nbsp;



William Reinsch, Scholl chair in international business at the Center for Strategic and International Studies, said the tariffs risk another trade war that would end most goods exchange between the two countries at an “enormous economic cost.”



Even if Trump’s aim is not a full decoupling but forcing Beijing into negotiating a more favorable trade deal, Reinsch said there’s little reason to believe that would work.



The Trump administration reached a “phase one trade deal” with China in 2019, but few terms were honored and subsequent phases never materialized.



Some commentators said Trump picking JD Vance as his running mate further signals the Republican is serious about his tariff plans. The senator from Ohio has been a staunch supporter of tariffs on China, identifying the country as the biggest threat facing the U.S. 



“If I was a China policy maker, this selection would have me shaking in my boots,” said Arthur Dong, professor of strategy and economics at Georgetown.&nbsp;



<h2 class="wp-block-heading"><a></a>Tech war</h2>



In contrast, the Biden-Harris administration’s key policies focused on limiting China’s access to technology transfers and directing domestic subsidies to develop high-tech industries and supply chains in the U.S.



The administration dramatically expanded the list of technologies and Chinese companies subject to U.S. export controls in efforts to cut support to critical tech industries in China, such as advanced semiconductors. The Trump administration had enacted some similar controls.



The Biden administration also announced rules limiting U.S. investment in Chinese firms developing sensitive technologies, citing national security concerns.



In perhaps Biden’s biggest move, the administration signed the CHIPS and Science Act in August 2022, putting aside almost $53 billion to invest in domestic semiconductor manufacturing and research to boost U.S. competitiveness with China.



Chris Miller, author of “Chip War,” noted export controls and the CHIPS Act were passed with bipartisan support in Washington, and thus, such policies are likely to remain a priority regardless of what happens in November.&nbsp;



“I expect that the U.S. will ratchet up restrictions a notch or two regardless of who wins the election,” Miller said.



<h2 class="wp-block-heading"><a></a>Diplomacy&nbsp;</h2>



A second term for Trump would also impact U.S. diplomacy and dialogue with Beijing beyond trade matters, said Rorry Daniels,&nbsp;managing director of the Asia Society Policy Institute.



She said channels for the two countries to discuss policy issues decreased significantly during the Trump administration, whereas the Biden administration emphasized its diplomatic engagement efforts.



The current administration has also sought greater coordination with “likeminded partners,” such as lobbying Japan and the Netherlands to cooperate on semiconductor restrictions. 



“That’s both helped minimize the blowback of his trade policy actions, while in many ways also making them more effective,” said Nick Marro, lead analyst for global trade with the Economist Intelligence Unit, adding he expects any future Democratic administration to retain this multilateral approach.&nbsp;



On the other hand, he said Trump opts for a more “go-it-alone” approach, allowing for a more rapid adoption of U.S. measures on China.



While the Biden-Harris administration’s “more measured and cautious” approach to China trade and diplomacy has done more to stabilize the relationship, Marro said he doubts Beijing is excited about either candidate.



“There’s this feeling that, regardless of&nbsp;which party&nbsp;sits in the White House,&nbsp;US-China relations will remain on a crash-course throughout the remainder of this decade.”



— CNBC’s Zenith Wong contributed to this report

Donald Trump And J.D. Vance Hold First Joint Campaign Rally After The RNC

Trump 2.0 could go ‘nuclear’ on China trade, while economists say Harris would remain tough

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1678" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2161957502-scaled.jpg" alt="" class="wp-image-510111" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2161957502-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2161957502-300x246.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2161957502-820x672.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2161957502-110x90.jpg 110w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2161957502-768x629.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-2161957502-1536x1259.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">FAYETTEVILLE, USA &#8211; JULY 18: US Vice President Kamala Harris holds a campaign event that is her seventh visit to North Carolina this year and 15th trip to the state since taking office in Fayetteville NC, United States on July 18, 2024 (Photo by Peter Zay/Anadolu via Getty Images)</figcaption></figure>



Democrats united behind Vice President Kamala Harris as the party’s front-runner for the presidential nomination Monday, and their excitement translated into a juggernaut day of fundraising for the party and for Harris’ campaign.



Late Monday night, NBC News projected that Harris had won endorsements from a majority of the Democratic party’s pledged convention delegates. The threshold is 1,976 delegates, and NBC estimates that Harris has the spoken or written backing of 1,992 delegates.



While not yet formally the party’s presumptive nominee, Harris’ position as frontrunner is rock solid, and no potential challengers have signaled they intend to vie for the nomination.



In the hours since President Joe Biden announced that he would end his teetering reelection campaign, Harris and the Democratic party have pulled in roughly $250 million in online donations and major donor commitments. 



The Democratic fundraising platform ActBlue has processed $106 million in contributions to Democratic candidates since Biden dropped out, according to an automated tracker. 



It is not clear yet how much of this money was given to House and Senate campaigns and how much went to the former Biden campaign, rebranded overnight as the Harris for President campaign.&nbsp;



In addition to the online donations, a super political action committee that supports the Biden-Harris ticket announced that over the past 24 hours, major donors have made contribution commitments totaling $150 million to the Harris election effort.&nbsp;



The pledges to Future Forward were described to NBC News as coming from donors who had been sitting on the sidelines for the past month, amid concerns about Biden as the nominee. 



The pledged donations to Future Forward are just that, however: promises. Until the PAC files mandatory federal campaign finance reports, these numbers cannot be verified.&nbsp;



The historic fundraising numbers are energizing Democrats and breathing new life into their bid to defeat former President Donald Trump and his Republican running mate, Sen. JD Vance of Ohio.



Since Sunday, more than 888,000 small-dollar donors have contributed to the Harris campaign, according to a memo late Monday.



Harris’ momentum could be the reason that West Virginia Sen. Joe Manchin, who recently switched his political affiliation to Independent, dropped his suggestion that he was open to challenging Harris for the Democratic nomination.



Republicans, meanwhile, are scrambling to retool a Trump campaign that was built to defeat Biden into one capable of defeating a very different candidate.



Trump spent much of the morning attacking Biden, but shifted to attacking Harris in the afternoon.

US Vice President Kamala Harris holds campaign in North Carolina

Majority of pledged Democratic delegates endorse Harris after massive fundraising day

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1332" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/CH74466FLFPLDMIKLENAOZO5UY-scaled.jpg" alt="" class="wp-image-423884" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/03/CH74466FLFPLDMIKLENAOZO5UY-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/CH74466FLFPLDMIKLENAOZO5UY-300x195.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/CH74466FLFPLDMIKLENAOZO5UY-820x533.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/CH74466FLFPLDMIKLENAOZO5UY-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/CH74466FLFPLDMIKLENAOZO5UY-768x500.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/03/CH74466FLFPLDMIKLENAOZO5UY-1536x999.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">FILE PHOTO: U.S. Vice President Kamala Harris speaks in Munich, Germany February 18, 2023. REUTERS/Wolfgang Rattay//File Photo</figcaption></figure>



Washington and the world are still reeling from President Joe Biden’s surprise announcement on Sunday that he is ending his teetering re-election campaign.



But Biden’s swift endorsement of Vice President Kamala Harris to replace him at the top of the Democratic ticket is energizing Democrats and breathing new life into their campaign to defeat former President Donald Trump and his running mate, Ohio Sen. JD Vance.



The “Biden for President” campaign committee has officially been renamed the Harris for President committee, maintaining the Biden team’s infrastructure, staff and — crucially — its $98 million in cash reserves.



Democrats excited about a new ticket have donated tens of millions of dollars online to the Harris for President campaign.



Now, speculation swirls about who the former California senator could choose for a potential running mate, if she becomes the party’s nominee. Several Democratic governors are early favorites, with strategists eyeing Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina and Kentucky Gov. Andy Beshear.



Republicans are meanwhile scrambling to retool a Trump campaign that was built to defeat Joe Biden into one capable of defeating a very different candidate.



Both parties want to know what happened to make it possible for a would-be assassin to shoot at Trump while he was on stage at a rally in Butler Pa. on July 13. Trump survived the attempt, but one of his supporters in the audience was killed.



This is a developing story&#8230;

FILE PHOTO: Vice President Kamala Harris

Democrats rally behind Kamala Harris after Biden drops out; running-mate speculation swirls

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1424" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/CQH2GCFS7VKHNNUO4RF6ABAM54-scaled.jpg" alt="" class="wp-image-417906" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/CQH2GCFS7VKHNNUO4RF6ABAM54-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/CQH2GCFS7VKHNNUO4RF6ABAM54-300x209.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/CQH2GCFS7VKHNNUO4RF6ABAM54-820x570.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/CQH2GCFS7VKHNNUO4RF6ABAM54-129x90.jpg 129w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/CQH2GCFS7VKHNNUO4RF6ABAM54-768x534.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/CQH2GCFS7VKHNNUO4RF6ABAM54-1536x1068.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">FILE PHOTO: U.S. President Joe Biden speaks as he attends the signing into law of the Ocean Shipping Reform Act of 2022, which will level the playing field for American exporters and importers, including farmers, and reduce costs for American consumers by lowering the cost of ocean shipping, at the White House in Washington, U.S., June 16, 2022. REUTERS/Evelyn Hockstein</figcaption></figure>



President&nbsp;Joe Biden&nbsp;on Sunday&nbsp;dropped out&nbsp;of the&nbsp;2024 presidential race&nbsp;and endorsed Vice President&nbsp;Kamala Harris&nbsp;as the Democratic Party’s nominee, bowing to weeks of growing pressure by his own party members to quit his re-election bid against former President&nbsp;Donald Trump.



“It has been the greatest honor of my life to serve as your President,” Biden wrote in a post on the social media site X.



“And while it has been my intention to seek reelection, I believe it is in the best interest of my party and the country for me to stand down and to focus solely on fulfilling my duties as President for the remainder of my term,” Biden wrote.



“I will speak to the Nation later this week in more detail about my decision,” wrote Biden, whose bombshell decision came after a sharp spike in recent days in the number of congressional Democrats publicly calling for him to step aside for another nominee.



Biden in a subsequent tweet wrote that his “very first decision as the party nominee in 2020 was to pick Kamala Harris as my Vice President.”



“And it’s been the best decision I’ve made. Today I want to offer my full support and endorsement for Kamala to be the nominee of our party this year. Democrats — it’s time to come together and beat Trump,” Biden wrote.



“Let’s do this.”



Harris in a statement said, “I am honored to have the President’s endorsement and my intention is to earn and win this nomination.”



Former President Bill Clinton and former Secretary of State Hillary Clinton, in a joint statement from the Democratic power couple, said, “We are honored to join the President in endorsing Vice President Harris and will do whatever we can to support her.”



Biden, who has been isolated at his Rehoboth, Delaware, beach home after being diagnosed with Covid-19, and Harris spoke on Sunday before he announced he would drop out of the election race.



NBC News reported that Biden at 1:45 p.m. ET Sunday told his senior campaign team that he had changed his mind about remaining in the contest.



On Sunday evening, on a campaign staff call, Biden campaign co-chair Jen O’Malley Dillon called for staff to rally behind their new candidate and said that their jobs would safely transfer to the Harris campaign, three sources familiar with the call told NBC News.



She also acknowledged the emotional weight of the moment: “It is ok to grieve, it is ok to be unsure but also be optimistic about our path forward.”



Trump in a phone interview with NBC News said of Biden’s decision, “He should never have been there in the first place.”



“He should have stayed in his basement,” said Trump, who was formally nominated as the Republican Party’s candidate last week, days after narrowly avoiding being killed in an assassination attempt at a Pennsylvania campaign rally on July 13.



Democratic National Committee Jamie Harrison in a statement said, “In the coming days, the Party will undertake a transparent and orderly process to move forward as a united Democratic Party with a candidate who can defeat Donald Trump in November.”



“This process will be governed by established rules and procedures of the Party. Our delegates are prepared to take seriously their responsibility in swiftly delivering a candidate to the American people,” Harrison said.



Biden’s move echoes the decision by another Democratic incumbent, President Lyndon Johnson, to drop out of the 1968 election as he faced turmoil over the Vietnam War, low approval ratings, and a surprisingly strong performance by Sen. Eugene McCarthy in the New Hampshire primary.



Biden’s campaign for weeks had insisted he would remain in the race, despite growing concern since his disastrous debate with Trump in late June that he was too old and frail to compete against the former president and serve a full second term if re-elected.



As of Sunday, nearly 40 Democratic members of Congress had urged Biden to drop out. Sen. Joe Manchin of West Virginia, who recently switched his political affiliation from Democrat to independent, earlier Sunday publicly said Biden should quit the race.



Rep. Nancy Pelosi, the California Democrat who previously served as speaker of the House of Representatives, in a tweet Sunday wrote, “President Joe Biden is a patriotic American who has always put our country first.”



“His legacy of vision, values and leadership make him one of the most consequential Presidents in American history,” Pelosi wrote. “With love and gratitude to President Biden for always believing in the promise of America and giving people the opportunity to reach their fulfillment. God blessed America with Joe Biden’s greatness and goodness.



Biden’s decision to drop out blows open the presidential race less than four months before Election Day.



It also poses extraordinary questions and challenges for the Democratic party, which now must scramble to assemble a new presidential ticket.



The next candidate will need to compete against the Republican ticket of Trump and Sen. JD Vance, win over donors, delegates and other allies who were loyal to the incumbent — all while convincing voters of their own worthiness for the nation’s highest office.



Biden’s campaign did not immediately respond to a request for comment.



Biden started to hemorrhage support from his own party and allies after his June 27 debate against Trump.



While he is only three years older than Trump, Biden looked and sounded significantly worse on the debate stage. He displayed a stiff posture and sometimes vacant-looking gaze, and he frequently gave answers that were raspy, unclear and ineffective.



In both substance and appearance, Biden contrasted sharply with Trump, who looked and sounded the same as he has in recent years.



The debate instantly set off a crisis among Democrats. Even before it ended, party operatives were raising doubts about whether Biden could effectively campaign against Trump.



High-profile Democratic donors and backers openly urged Biden to drop out, with some vowing to&nbsp;withhold campaign contributions&nbsp;in the meantime.



Biden and his aides spent weeks trying to stanch the bleeding.



In his first post-debate interview, Biden said he was convinced that he is the best person to take on Trump, adding that he could only be persuaded to step down “if the Lord Almighty comes out and tells me that.”



But as his resolute posture failed to quell the&nbsp;unrest in his party, Biden suggested he could be moved to withdraw in other ways.



In a BET interview that aired Wednesday during the Republican National Convention, Biden said he might reconsider his decision to stay in the race “if I had some&nbsp;medical condition that emerged.”



On the same day that interview was set for broadcast, Biden&nbsp;tested positive for Covid. He canceled a scheduled appearance in Las Vegas and returned his beach house in Delaware.



Biden is already the oldest person ever to serve in the White House.



He would have been 86 at the end of a second term. He had&nbsp;weathered questions&nbsp;about his physical and mental fitness even during his 2020 run.



Those concerns grew in the 2024 cycle, but they were aggressively batted down by Biden’s campaign and White House aides, and the president’s relative lack of press conferences and interviews may have shielded scrutiny about his acuity.

U.S. President Joe Biden signs into law the Ocean Shipping Reform Act of 2022

Biden drops out of 2024 presidential election, endorses Kamala Harris as Democratic nominee

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1366" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/GettyImages-154793099-scaled.jpg" alt="" class="wp-image-408693" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/07/GettyImages-154793099-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/GettyImages-154793099-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/GettyImages-154793099-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/GettyImages-154793099-120x80.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/GettyImages-154793099-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/07/GettyImages-154793099-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">A sign stands at the entrance to the offices of Anglo American Plc in the Marshalltown district of Johannesburg, South Africa, on Friday, Oct. 26, 2012. Anglo American Plc Chief Executive Officer Cynthia Carroll , the first woman, external hire and non-South African to hold the job, will quit after Anglo lost $14 billion in value in the more than five years she was in charge. Photographer: Chris Ratcliffe/Bloomberg via Getty Images</figcaption></figure>



LONDON July 18 (Reuters) &#8211; Anglo American said its copper output was almost flat in the first half, while it curbed this year&#8217;s output forecast for coking coal, which is likely to weigh on earnings just months after it rebuffed a takeover bid from rival BHP Group.



Copper production rose 2% to 393,800 metric tons in the six months through June and is on track to meet full-year guidance, Anglo said in a statement.



Copper demand is expected to rise sharply in coming years for use in applications ranging from solar panels and electric cars to data centres for artificial intelligence.



Anglo&#8217;s share price was up 1.4% by 0709 GMT.



Anglo cut its output guidance for steelmaking coal to between 14 million tons to 15.5 million tons from 15 to 17 million tons previously, as it battles an underground fire at its Grosvenor coal mine in Australia that started on June 29.



Anglo has put its five operating coal mines, development projects and joint ventures in Australia up for sale, as part of a wider plan to divest less profitable assets and focus on expanding copper output after BHP&#8217;s failed attempt to take over the company. But analysts say the timing and value of a planned sale of coal assets are now uncertain.



&#8220;The mine has been stabilised and we are re-establishing comprehensive underground gas monitoring, prior to being able to assess the steps towards a safe re-entry into the mine,&#8221; Anglo said in a statement on Thursday.



Assessment of the damage and re-opening is likely to take several months, the company said.



Iron ore production was also flat at around 31 million tons in the first half, while platinum group metals (PGM) output fell 5% and rough diamond production dropped 19%.



&#8220;An expected recovery in PGM and diamond prices could help sentiment while a renewed approach from BHP cannot be ruled out,&#8221; analyst Marina Calero at RBC Capital Markets said.



&#8220;However, we view the outlook for Anglo as more balanced in the near term as the sale of the steelmaking coal assets gets more complicated at a time when we expect iron ore prices to roll in H2 24,&#8221; she added.



(Reporting by Clara Denina and Felix Njini; editing by Jason Neely and Sharon Singleton)

Anglo American Plc’s South African Headquarters As CEO Cynthia Carroll Quits

Anglo cuts coal output forecast after fire at Australian mine

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1600" height="900" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/106463174-1585290052493gettyimages-871925648.jpeg" alt="" class="wp-image-508834" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/106463174-1585290052493gettyimages-871925648.jpeg 1600w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/106463174-1585290052493gettyimages-871925648-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/106463174-1585290052493gettyimages-871925648-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/106463174-1585290052493gettyimages-871925648-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/106463174-1585290052493gettyimages-871925648-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/106463174-1585290052493gettyimages-871925648-1536x864.jpeg 1536w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Chinese President Xi Jinping and former U.S. President Donald Trump in Beijing, China, in 2017. Artyom Ivanov | TASS | Getty Images</figcaption></figure>



BEIJING — If Donald Trump wins the U.S. presidential election, his plans for 60% tariffs on Chinese goods could be a “major downside growth risk” to China, according to Goldman Sachs.



Chances of Trump becoming the next president ticked higher after he survived an assassination attempt on Saturday and selected former critic JD Vance as his running mate two days later.



“Right now exports are a major bright spot in the Chinese economy, and I think the policymakers might want to be prepared,” Hui Shan, chief China economist at Goldman Sachs told CNBC’s “Squawk Box Asia” on Tuesday.



“We are seeing tariff narratives, not only in the U.S., but across other major trading partners of China’s,” she said. “So this is not going to be a sustainable driver of growth for China.”&nbsp;



The U.S. is China’s largest trading partner on a single-country basis, while the European Union has fallen behind Southeast Asia as China’s largest regional trading partner. Trump had raised duties on Chinese goods when president in 2018 and has threatened to increase them to 60% if reelected this fall.\



The contribution of goods exports to real GDP growth in China for the second quarter of this year was the highest since the first quarter of 2022, when Covid restrictions limited domestic economic activity, according to Citi.



Meanwhile,&nbsp;Beijing’s push to develop high-end manufacturing has not yet been able to fully offset a real estate slump and lackluster consumption.



U.S. officials such as Treasury Secretary Janet Yellen have said that China’s policies to boost its industrial capability and technological self-reliance have led to U.S. job losses.



<h2 class="wp-block-heading" id="h-china-the-biggest-threat"><a></a>China the ‘biggest threat’?</h2>



In his first interview since he was selected as Trump’s running mate, Vance told Fox News that instead of the war in Ukraine, China was the “real issue” for the U.S. and posed the “biggest threat.”



The Biden campaign has criticized Trump’s pick, saying the choice was deliberately made “because Vance will do what Mike Pence wouldn’t on January 6: bend over backwards to enable Trump and his extreme MAGA agenda, even if it means breaking the law and no matter the harm to the American people.”



Supporters of Trump, who was president at that time, had stormed the U.S. Capitol in an attempt to overturn the 2020 presidential election results on January 6, 2021.



Asked about Vance’s comment, China’s Ministry of Foreign Affairs spokesperson Lin Jian said Tuesday at a daily press briefing, “We are always opposed to making China an issue in U.S. elections.”



<h2 class="wp-block-heading" id="h-calls-for-stimulus"><a></a>Calls for stimulus</h2>



China’s economy grew by 4.7% in the second quarter compared to a year ago, missing economists’ expectations and bringing growth for the first half of the year to 5%. It prompted some calls for more stimulus if the world’s second-largest economy is to reach 5% growth for the full year.



The downside risk from potentially higher U.S. tariffs under Trump would primarily come from the greater uncertainty and tighter financial conditions, as well as pressure on the Chinese yuan, Goldman’s Shan said. She pointed out that tariffs in 2018 did not significantly dent China’s exports to the U.S.



More recent data, however, showed a slowdown in that trade. China’s exports to the U.S. rose by a modest 1.5% in the first half of the year.



“Policymakers need to think about domestic demand and focusing on something that is more persistent and sustainable for the growth outlook,” Shan told CNBC on Tuesday.



If 60% tariffs are imposed, “that’s pretty high and we think the implication for the macro economy is pretty significant,” she added.



So far, China has held back on stimulus measures. The country’s top leaders are meeting in Beijing this week for a highly anticipated Third Plenum, which is expected to determine long-term economic policy goals.



Citi analysts said Monday that weak retail sales and disappointing second-quarter growth won’t be enough to convince Beijing to increase support for the economy.



“Policymakers may tolerate short-term weakness amid the structural shift of the property sector,” the analysts said. “More concerns on trade and external relationships could also lead China to save the policy space for future.”



Citi forecasts 5.0% growth in real GDP growth for China this year.



China’s U.S. dollar-denominated exports grew by 3.6% in the first six months of the year after better-than-expected global demand for Chinese goods in recent months.



“Manufacturing and infrastructure investment may stay robust and exports should stay in decent [year-on-year] growth in [the third quarter], with possible front-loading of shipment orders in [the second half of the year] due to fears of higher tariffs,” Tao Wang, head of Asia economics and chief China economist at UBS Investment Bank said in a note Tuesday.



She said Chinese authorities would likely be reluctant to roll out major stimulus in the next few months in order to save resources in the case of greater economic weakness and increased tariffs.



UBS forecasts 4.9% growth for China’s economy this year.



<h2 class="wp-block-heading"><a></a>Trump the dealmaker</h2>



Not all analysts believe a possible Trump presidency will prove detrimental to China, though.



Ben Harburg of Corevalues Alpha told CNBC on July 4 that he believes China is more likely to have “positive” trade outcomes under a Trump presidency, given the ex-president’s “transactional nature.” “He’s a dealmaker, and like any negotiator, he likes to kind of set the bar low, and kind of set his price low, and then work up from there,” the portfolio manager said on “Street Signs Asia.”



Speaking on foreign policy, Harburg pointed out that another Biden term would also mean continued tariffs, as well as “encroachment on Chinese domestic issues” — which would not significantly improve China’s economy, nor U.S.-China relations.



He said a Trump-China partnership would signify “a more binary potential for a positive outcome for China.”



CNBC’s Sonia Heng contributed reporting from Singapore.

106463174-1585290052493gettyimages-871925648

What would a second Trump presidency mean for China? Goldman Sachs weighs in

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1365" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107405347-1713901590053-gettyimages-1467862508-r15207-fr-01-ge-01-scaled.jpeg" alt="" class="wp-image-508539" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107405347-1713901590053-gettyimages-1467862508-r15207-fr-01-ge-01-scaled.jpeg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107405347-1713901590053-gettyimages-1467862508-r15207-fr-01-ge-01-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107405347-1713901590053-gettyimages-1467862508-r15207-fr-01-ge-01-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107405347-1713901590053-gettyimages-1467862508-r15207-fr-01-ge-01-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107405347-1713901590053-gettyimages-1467862508-r15207-fr-01-ge-01-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107405347-1713901590053-gettyimages-1467862508-r15207-fr-01-ge-01-1536x1024.jpeg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Golden Horn and Bosphorus at sunset, Istanbul, Turkey Matteo Colombo | Digitalvision | Getty Images</figcaption></figure>



Turkey came out miles ahead of the rest of the world in an annual global wealth ranking — in a result that may come as surprising, given the country’s high levels of inflation.



“Türkiye stands out with a staggering growth of over 157% in wealth per adult between 2022 and 2023, leaving all other nations far behind,” Swiss bank UBS wrote in its Global Wealth Report 2024, using the local spelling for the country’s name.



The next-highest countries in terms of average wealth growth per adult were Russia and Qatar with nearly 20% and South Africa with just over 16%. In the U.S., average wealth per adult grew by nearly 2.5%.



Inflation in Turkey sits at nearly 72%, an eye-watering figure for the country’s 85 million people, many of whom have seen a dramatic drop in their purchasing power over the last several years. In the last five years, the Turkish lira has lost nearly 83% of its value against the dollar, and the currency trades at 33 lira to the greenback as of 09:07 a.m. London time on Wednesday.



But for Turks who own assets like homes, wealth has grown, as inflation pushes up the costs of those holdings.



The UBS report defines net worth or “wealth” as “the value of financial assets plus real assets (principally housing) owned by households, minus their debts.” In a call with journalists, some of the report’s authors broke down the relationship between inflation and wealth rises in Turkey.



“In certain ways, the high pace of inflation also helps explain why wealth has risen much much more in local currency terms, at least [more] than in other countries because it’s worth keeping in mind that wealth is measured in nominal terms,” Samuel Adams economist at UBS Global Wealth Management, told CNBC.



“If inflation is very high, what tends to happen is that if you have a real asset like housing, the house prices tend to rise in line with inflation, if not even faster,” he said. “So those people with have homeownership, or who have equities, which also tend to perform fairly well in those environments, they tend to see their wealth accumulate a bit faster.



“Of course, it doesn’t mean that everybody benefits to the same extent,” Adams added. “If you’re not in those assets, if your wage rises don’t keep pace with inflation, then, of course, it will be fairly negatively affected.”



The report also noted the “currency effect”, which is what changes wealth growth the most — local currency growth figures for wealth are often significantly different from those in dollar terms.



“Türkiye’s already exceptional growth of over 63% in USD &#8230; more than doubles to nearly 158% in Turkish lira,” it said. Other examples in the report included Japan, which in dollar terms has seen less than 2% average growth in wealth per adult in U.S. dollar terms between 2022-23, but in local currency that growth was 9%.



Evaluating countries’ average wealth growth between the years of 2008 and 2023, “the most dramatic evolution has taken place in Türkiye,” UBS wrote, “where average wealth per adult in this period has shot up by 1708% in local currency.”



UBS Global Wealth Management’s Chief Economist Paul Donovan pointed out that being asset-rich does not necessarily mean being cash-rich — in Turkey, this could actually be the opposite.



“In terms of living standards rather than wealth, it’s also important to remember that if you own a house, the value of your house has gone up, but your real wage may be negative at the same time. So you can be &#8230; asset rich and cash poor,” Donovan said last week.



“That’s certainly a possibility, where a lot of the stresses that have arisen in the Turkish economy over the last few years have come about because of negative real income,” he added, “not necessarily what’s happening on the asset side.”

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Wealth growth in Turkey, South Africa shows surprising expansion

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-820x547.jpg" alt="" class="wp-image-493882" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/6A7M3AO7TJLVNGKEVN2F6TDGYE-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas</figcaption></figure>



WASHINGTON, July 16 (Reuters) &#8211; The global economy is set for modest growth over the next two years amid cooling activity in the U.S., a bottoming-out in Europe and stronger consumption and exports for China, but risks to the path abound, the International Monetary Fund said on Tuesday.



The IMF warned in an update to its World Economic Outlook(WEO) that momentum in the fight against inflation is slowing, which could further delay an easing of interest rates and keep up strong dollar pressure on developing economies.



The IMF kept its 2024 global real gross domestic product growth forecast unchanged from April at 3.2% and raised its 2025 forecast by 0.1 percentage point to 3.3%. The forecasts fail to shift growth from the lackluster levels that IMF managing director Kristalina Georgieva has warned would lead to &#8220;the tepid twenties.&#8221;



But the revised outlook reflected some shifting sands among major economies, with the 2024 U.S. growth forecast reduced by 0.1 percentage point to 2.6%, reflecting slower-than-expected first-quarter consumption. The Fund&#8217;s 2025 U.S growth forecast was unchanged at 1.9%, a slowdown driven by a cooling labor market and moderating spending in response to tight monetary policy.



&#8220;Growth in major advanced economies is becoming more aligned as output gaps are closing,&#8221; IMF chief economist Pierre-Olivier Gourinchas said in a blog post accompanying the report, adding that the U.S. was showing increasing signs of cooling, while Europe was poised to pick up.



The IMF significantly hiked its China growth forecast to 5.0% &#8211; matching the Chinese government&#8217;s target for the year &#8211; from 4.6% in April due to a first-quarter rebound in private consumption and strong exports. The IMF also boosted its 2025 China growth forecast to 4.5% from 4.1% in April.



<h2 class="wp-block-heading" id="h-china-risks">CHINA RISKS</h2>



But China&#8217;s momentum may be sputtering, as Beijing on Monday reported second-quarter GDP growth of just 4.7%, significantly below forecasts amid weak consumer spending amid a protracted property downturn.



Gourinchas told Reuters in an interview that the new data poses a downside risk to the IMF forecast, as it signals weakness in consumer confidence and continuing problems in the property sector. To boost domestic consumption, China needs to fully resolve its property crisis, as real estate is the main asset for most Chinese households.



&#8220;When you&#8217;re looking at China, the weaker the domestic demand, the more growth is going to rely potentially on the external sector,&#8221; he said, inviting more trade tensions.



On a more positive note, the IMF slightly upgraded its 2024 eurozone growth forecast by 0.1 percentage point to 0.9%, leaving the bloc&#8217;s 2025 forecast unchanged at 1.5%.



The eurozone has &#8220;bottomed out&#8221; and saw stronger first-half services growth, while rising real wages will help power consumption next year and easing monetary policy will aid investment, the IMF said.



It cut Japan&#8217;s 2024 growth forecast to 0.7% from 0.9% in April due in part to supply disruptions from a major auto plant shutdown and weak private investment in the first quarter.



<h2 class="wp-block-heading" id="h-inflation-risks-remain">INFLATION RISKS REMAIN</h2>



The IMF warned of near-term upside risks to inflation as services prices remain elevated amid wage growth in the labor-intensive sector and said renewed trade and geopolitical tensions could stoke price pressures by increasing the cost of imported goods along the supply chain.



&#8220;The risk of elevated inflation has raised the prospects of higher-for-even-longer interest rates, which in turn increases external, fiscal and financial risks,&#8221; the IMF said in the report.



Gourinchas said that despite a fall in U.S. consumer prices last month, the Federal Reserve



can afford to wait



a bit longer to begin cutting rates to avoid any inflationary surprises.



<h2 class="wp-block-heading" id="h-protectionism-risks">PROTECTIONISM RISKS</h2>



The IMF also warned of potential swings in economic policy as a result of many elections this year that could have negative spillovers to the rest of the world.



&#8220;These potential shifts entail fiscal profligacy risks that will worsen debt dynamics, adversely affecting long-term yields and ratcheting up protectionism,&#8221; the Fund said.



The Fund did not name U.S. Republican Party candidate Donald Trump, who has proposed to impose a 10% tariff on all U.S. imports, nor Democratic President Joe Biden, who has sharply hiked tariffs on Chinese electric vehicles, batteries, solar panels and semiconductors.



But it said that higher tariffs and a scaling up of domestic industrial policy could create &#8220;damaging cross-border spillovers, as well as trigger retaliation, resulting in a costly race to the bottom.&#8221;



Instead, the IMF recommended that policymakers persevere with restoring price stability &#8211; easing monetary policy only gradually &#8211; replenish fiscal buffers drained during the pandemic and pursue policies that promote trade and increase productivity. 



(Reporting by David Lawder; Editing by Andrea Ricci and Dan Burns)

IMF logo is seen outside the headquarters building in Washington

IMF sees steady global growth, warns of slowing disinflation momentum

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-820x461.jpeg" alt="" class="wp-image-505971" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Consumers are shopping at a supermarket in Qingzhou, China, on June 12, 2024.  Nurphoto | Nurphoto | Getty Images</figcaption></figure>



BEIJING — China’s consumer price inflation rose by 0.2% in June from a year ago, missing expectations, while producer prices fell in-line with forecasts, data from the National Bureau of Statistics on Wednesday showed.



China’s consumer price index was expected to rise by 0.4% year-on-year in June, according to a poll by Reuters.



The producer price index, which measures factory-gate prices, dropped by 0.8% from a year ago — in line with expectations.



Core CPI, which strips out more volatile food and energy prices, rose by 0.6% year-on-year in June, slightly slower than the 0.7% increase for the first six months of the year.



Pork prices surged by 18.1% in June from a year ago, while beef prices fell by 13.4%. Tourism prices rose by 3.7% year-on-year in June, down by 0.8% from May.



“The risk of deflation has not faded in China. Domestic demand remains weak,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.



He added that China would rely on exports to support growth in the first half of the year.



The country is scheduled to release trade data for June on Friday.



Lackluster domestic demand in China has kept inflation low, in contrast to major economies such as the U.S. where prices have remained elevated.







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China’s inflation numbers miss expectations, rising 0.2% in June

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="929" height="523" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell.jpeg" alt="" class="wp-image-505743" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell.jpeg 929w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-768x432.jpeg 768w" sizes="auto, (max-width: 929px) 100vw, 929px" /><figcaption class="wp-element-caption">Federal Reserve Chair Jerome Powell speaks during a House Financial Services Committee hearing on the “Federal Reserve’s Semi-Annual Monetary Policy Report” on Capitol Hill in Washington, U.S., March 6, 2024.&nbsp; Bonnie Cash | Reuters</figcaption></figure>



Federal Reserve Chair&nbsp;Jerome Powell&nbsp;on Tuesday expressed concern that holding interest rates too high for too long could jeopardize economic growth.



Setting the stage for a two-day appearance on Capitol Hill this week, the central bank leader said the economy remains strong as does the labor market, despite some recent cooling. Powell cited some easing in inflation, which he said policymakers stay resolute in bringing down to their 2% goal.



“At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” he said in prepared remarks. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”



The commentary coincides with the approaching one-year anniversary of the last time the Federal Open Market Committee raised benchmark interest rates.



The Fed’s overnight borrowing rate currently sits in a rage of 5.25%-5.5%, the highest level in some 23 years and the product of 11 consecutive hikes after inflation hit its highest level since the early 1980s.



Markets expect the Fed to begin cutting rates in September and likely following up with another quarter percentage point reduction by the end of the year. FOMC members at their June meeting, however,&nbsp;indicated just one cut.



<h2 class="wp-block-heading" id="h-strengthen-our-confidence"><a></a>‘Strengthen our confidence’</h2>



In recent days, Powell and his colleagues have indicated that&nbsp;recent inflation data has been somewhat encouraging&nbsp;after a surprise jump to start the year. Inflation as judged by the Fed’s preferred&nbsp;personal consumption expenditures price index&nbsp;was at 2.6% in May after peaking above 7% in June 2022.



“After a lack of progress toward our 2 percent inflation objective in the early part of this year, the most recent monthly readings have shown modest further progress,” Powell said. “More good data would strengthen our confidence that inflation is moving sustainably toward 2 percent.”



The statement is part of congressionally mandated semiannual updates on monetary policy. After delivering the remarks, Powell will face questioning from Senate Banking Committee members on Tuesday, then the House Financial Services Committee on Wednesday.



In past appearances, Powell has veered away from making dramatic policy announcements while having to dodge politically loaded questions from committee members. The questioning could get contentious this year as Washington is on edge amid a volatile presidential campaign.



However, Powell has stressed that the Fed is not political and does not get involved in taking policy sides outside of its own roles. In his prepared remarks, he emphasized the importance of “the operational independence that is needed” for the Fed to do its job.



His other remarks focused squarely on the stance of policy in relation to the broader economy. Recent data has shown the&nbsp;unemployment rate creeping higher&nbsp;and broad growth as measured by gross domestic product receding. Both the manufacturing and services sectors reported being in contraction during June.



But Powell said the data is showing that “the U.S. economy continues to expand at a solid pace” despite the deceleration in GDP.



“Private domestic demand remains robust, however, with slower but still-solid increases in consumer spending,” he said.

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Fed Chair Powell says holding rates high for too long could jeopardize economic growth

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-820x547.jpg" alt="" class="wp-image-505670" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A person casts a ballot in the second round of the early French parliamentary elections, at a polling station in Paris, France, July 7, 2024. REUTERS/Sarah Meyssonnier</figcaption></figure>



July 9 (Reuters)&nbsp;&#8211;&nbsp;Elections are taking place this year in countries home to almost half of the world&#8217;s population, from Taiwan&#8217;s general election in January to the U.S. presidential race in November.



The votes come amid growing economic and geopolitical strife, with the Ukraine war, conflicts in the Middle East and rising trade tensions between the United States and China, the world&#8217;s two largest economies.



In some countries, there are concerns about the resilience of democracy itself as political discourse has polarized or been warped by disinformation. Many of this year&#8217;s elections will not be free and fair &#8211; or their results will be disputed.



Half-way through the biggest year for elections in history, here are some common themes that have emerged in Reuters&#8217; reporting from around the world:



<h2 class="wp-block-heading" id="h-cost-of-living">COST OF LIVING</h2>



From the price of green onions in Indonesia to higher fuel bills across Europe, rises in the price of food, energy and other basics have hit the living standards of households across the world. Incumbent governments and leaders are paying for it.



Polling showed that cost of living concerns were a powerful factor in a fall in support for Prime Minister Narendra Modi&#8217;s party in India, losses suffered by mainstream parties in June&#8217;s European Parliament elections and the poll rout of Britain&#8217;s ruling Conservatives.



In Africa, discontent over living standards and unemployment contributed to the ANC&#8217;s loss of its majority in South Africa&#8217;s election. Worsening poverty is likely to help shape the outcome of Ghana&#8217;s December vote to succeed President Nana Akufo-Addo.



Polling ahead of the U.S. election suggests voters are similarly unimpressed with President Joe Biden&#8217;s efforts to improve their livelihoods, with many Americans feeling their living standards are falling despite strong headline economic data. One outlier: In Mexico, the ruling MORENA party emerged the winner after offering ample subsidies to low-income voters.



While economic policymakers say there are signs that inflation is returning to normal, they warn it has not yet been fully tamed and many economies remain fragile.



&#8220;A number of pressure points could throw the global economy off track,&#8221; Agustin Carstens, head of the central bank umbrella group the Bank of International Settlements (BIS), warned in June.



<h2 class="wp-block-heading" id="h-green-transition">GREEN TRANSITION</h2>



With the cost of living uppermost in many voters&#8217; minds, climate change action has often been crowded out of election campaigns &#8211; even as global temperatures break new records and death tolls from extreme heat climb.



While surveys show Europeans still support ambitious action on global warming, the debate there has focused on the perceived cost to livelihoods, with farming and other lobbies stepping up calls for an easing of net-zero policies.



In the EU elections, ecologist Greens shed most of the gains made five years earlier. In Britain, Labour dropped a 28-billion-pound green investment pledge ahead of the July 4 general election, saying the country could not afford it, while their Conservative rivals described themselves as &#8220;on the side of drivers&#8221;, attacking low-traffic and low-emission schemes.



The biggest challenge to the green transition may come from the United States, with Donald Trump campaigning on policies supporting continued fossil fuel use. It remains to be seen how much of Biden&#8217;s Inflation Reduction Act (IRA) green subsidies stay in place in the event of a Trump victory.



<h2 class="wp-block-heading" id="h-swing-to-the-far-right">SWING TO THE (FAR)RIGHT?</h2>



The cost of living crisis has led to rising support for far-right movement&nbsp;in Western countries&nbsp;with a mix of anti-immigration and nationalist policies, often unfunded economic spending plans and populist rhetoric attacking global elites.



Back in March, Portugal&#8217;s Chega party quadrupled its seats in parliament to become the country&#8217;s third-largest party. Three months later, its far-right, eurosceptic peers across Europe made gains in elections to the European Parliament.



In France, Marine Le Pen&#8217;s National Rally failed in elections on Sunday to achieve the majority they were coveting but became the largest single party in a hung parliament that now risks plunging Europe&#8217;s second-largest economy into policy paralyis.



In Britain, the anti-immigrant, nationalist Reform Party won over four million votes, contributing to the collapse in support for the ruling Conservatives even if Britain&#8217;s first-past-the-post electoral system meant it only won a handful of seats.



Austria&#8217;s Sept. 29 election will be closely watched, with polls showing the far-right Freedom Party (FPO) leading rivals after it ranked first in European Parliament elections.



In the United States, Trump has made immigration one of his top domestic campaign issues, declaring he would carry out mass deportations, end birthright citizenship, and expand a travel ban on people from certain countries.



Mohit Kumar, chief economist for investment house Jefferies, noted that immigration as an election theme was hottest in precisely the large Western economies whose ageing populations were creating labour shortages.



&#8220;Economically we need immigration but the political dynamics are shifting away from immigration,&#8221; he said.



<h2 class="wp-block-heading" id="h-debt-and-election-largesse">DEBT AND ELECTION LARGESSE</h2>



With economic hardship so prevalent, many politicians are offering to spend big and cut taxes in a bid to win power &#8211; at the risk of adding to global debt already at record levels after huge post-pandemic stimulus packages in rich-world economies.



Credit rating firm S&amp;P Global has warned the United States, France and other Group of Seven (G7) governments were unlikely to halt rises in their debt &#8220;at the present stage in their electoral cycles&#8221;.



The BIS annual report in June said an election year like this brought an &#8220;especially high&#8221; risk of fiscal expansion that could complicate efforts to bring inflation down to target.



Budget watchdogs in Britain and France &#8211; two countries struggling to balance their budgets &#8211; noted that many spending pledges were either unfunded or unrealistically costed.



Trump has pledged to keep in place a broad 2017 tax cut that he signed while in office, and his economic team has discussed a further round of cuts beyond those enacted in his first term.



Biden, meanwhile, proposes raising levies on businesses and rich individuals, while vowing not to increase taxes for households earning less than $400,000 a year and to assist low- and middle-income Americans with childcare costs. U.S. federal government currently has more than $34 trillion in debt.



Such levels of debt are seen making the global economy more vulnerable to financial shocks and the International Monetary Fund has urged governments to reduce their borrowing.



&#8220;Unfortunately, fiscal plans so far are insufficient and could be derailed further given the record number of elections this year,&#8221; its chief economist Pierre-Olivier Gourinchas said in a recent blog.



<h2 class="wp-block-heading" id="h-defence-and-security">DEFENCE AND SECURITY</h2>



As geopolitical tensions rise, defence and security matters have been prominent in a number of election campaigns so far this year &#8211; particularly in countries near the hotspots.



In February, Finland elected as president Alexander Stubb, who campaigned on the previously non-aligned country fully participating in NATO and allowing the transit of nuclear arms through it. Incumbents in Lithuania won an election dominated by concerns over Russia and calls for higher defence spending.



Taiwan&#8217;s presidential and parliamentary elections on Jan. 13 focused around arguments on how best to deal with China, which views the island as its own territory. The ruling DPP party secured the presidency for a third term as its candidate vowed to safeguard Taiwan from intimidation while emphasising the need for dialogue with Beijing.



In the United States, Democratic voters&#8217; anger over Israel&#8217;s military action in Gaza &#8211; and over Biden&#8217;s continued support of Israel – has emerged as a major vulnerability for him. American views on the conflict have broken down along party lines with Republicans largely supporting Israel.



While Biden voices unwavering support for NATO, Trump has said that if he is returned to the White House, America would fundamentally rethink NATO&#8217;s purpose. He has also asserted without evidence that if elected he would end the conflict in Ukraine before even taking office. On that, Biden has retorted that Trump has &#8220;no idea what he&#8217;s talking about&#8221;.



<h2 class="wp-block-heading" id="h-democracy-at-stake">DEMOCRACY AT STAKE?</h2>



Pro-democracy watchdogs estimate that nearly three-quarters of the world&#8217;s population live in autocracies. Observers and human rights groups have signalled concerns about the fairness of elections this year in Bangladesh, Azerbaijan, Belarus, Cambodia, Iran and Russia. Votes in Algeria and Uzbekistan face similar questions.



Modi&#8217;s electoral setback has been hailed by some commentators as proof of the resilience of its democracy. There was relief at the peaceful handover of power in Senegal in March after moves by the incumbent to delay the vote triggered protests.



Democracy&#8217;s biggest test this year may, however, be in Washington.



Trump refuses to commit to accepting the election results or to rule out possible violence around the Nov. 5 contest. He is already laying the groundwork to contest a potential defeat.



&#8220;We should be quite worried,&#8221; Steven Levitsky, political scientist and professor of government at Harvard University, told a Brookings think tank event in June.



&#8220;A democracy cannot survive if one party in a two-party system is not committed to playing by the democratic rules of the game.&#8221;



(Graphics by Sumanta Sen and Anand Katakam; Editing by Simon Robinson and Daniel Flynn)

France votes in the second round of the 2024 snap legislative elections

How this year of elections is set to reshape global politics

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108002009-17201812992024-07-05t115950z_1558437106_rc2zo8ashg9w_rtrmadp_0_britain-election-820x546.jpeg" alt="" class="wp-image-505243" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108002009-17201812992024-07-05t115950z_1558437106_rc2zo8ashg9w_rtrmadp_0_britain-election-820x546.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108002009-17201812992024-07-05t115950z_1558437106_rc2zo8ashg9w_rtrmadp_0_britain-election-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108002009-17201812992024-07-05t115950z_1558437106_rc2zo8ashg9w_rtrmadp_0_britain-election-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108002009-17201812992024-07-05t115950z_1558437106_rc2zo8ashg9w_rtrmadp_0_britain-election-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108002009-17201812992024-07-05t115950z_1558437106_rc2zo8ashg9w_rtrmadp_0_britain-election-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108002009-17201812992024-07-05t115950z_1558437106_rc2zo8ashg9w_rtrmadp_0_britain-election-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">British Prime Minister Keir Starmer delivers his speech outside Downing Street 10, following the results of the election, in London, Britain, July 5, 2024.  Claudia Greco | Reuters</figcaption></figure>



Britain’s new Prime Minister Keir Starmer said on Saturday he would scrap a controversial plan to fly thousands of asylum seekers from Britain to Rwanda in his first major policy announcement since winning a landslide election victory.



The previous Conservative government first announced the plan in 2022 to send migrants who arrived in Britain without permission to the East African nation, saying it would put an end to asylum seekers arriving on small boats.



But no one was sent to Rwanda under the plan because of years of legal challenges.



At his first press conference since becoming prime minister, Starmer said that the Rwanda policy would be scrapped because only about 1% of asylum seekers would have been removed and it would have failed to act as a deterrent.



“The Rwanda scheme was dead and buried before it started. It’s never been a deterrent,” Starmer said. “I’m not prepared to continue with gimmicks that don’t act as a deterrent.”



Starmer won one of the largest parliamentary majorities in modern British history on Friday, making him the most powerful British leader since former Prime Minister Tony Blair, but he faces a number of challenges, including improving struggling public services and reviving a weak economy.



At the press conference in Downing Street, Starmer answered about a dozen questions and was repeatedly asked about how and when he would start delivering on his promises to fix the nation’s problems, but he gave few specifics about what he planned.



Asked if he was willing to take tough decisions and raise taxes if necessary, Starmer said his government would identify problems and act in areas such as tackling an overstretched prisons system and reducing the long waiting times to use the state-run health service.



“We’re going to have to take the tough decisions and take them early, and we will. We will do that with a raw honesty,” he said. “But that is not a sort of prelude to saying there’s some tax decision that we didn’t speak about before.”



Starmer said he would set up and chair different “mission delivery boards” to focus on so-called missions or priority areas such as the health service and economic growth.



<h2 class="wp-block-heading" id="h-election-issue"><a></a>Election issue</h2>



The question of how to stop the asylum seekers crossing from France was a major theme of the six-week election campaign.



While supporters say it would smash the model of people traffickers, critics have argued the Rwanda policy was immoral and would never work.



Last November, the UK Supreme Court declared the policy unlawful, saying Rwanda could not be considered a safe third country, prompting ministers to sign a new treaty with the East African country and to pass new legislation to override this.



The legality of that move was being challenged by charities and unions in the courts.



The British government has already given the Rwandan government hundreds of millions of pounds to set up accommodation and hire extra officials to process the asylum seekers, money it cannot recover.



Starmer has said his government would create a Border Security Command that would bring together staff from the police, the domestic intelligence agency and prosecutors to work with international agencies to stop people smuggling.



Sonya Sceats, CEO of Freedom from Torture, one of the many organizations and charities which have campaigned to stop the Rwanda plan, welcomed Starmer’s announcement on Saturday.



“We applaud Keir Starmer for moving immediately to close the door on this shameful scheme that played politics with the lives of people fleeting torture and persecution,” she said.

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International

Here’s everything you need to know about Friday’s big jobs report

Bank of England to make knife-edge call on interest rates as markets favor cut

Dubai set to welcome even more millionaires as wealthy individuals abandon the UK

Fed’s key inflation gauge rose 2.5% in June from a year ago, easing path to rate cut

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Anglo cuts coal output forecast after fire at Australian mine

What would a second Trump presidency mean for China? Goldman Sachs weighs in

Wealth growth in Turkey, South Africa shows surprising expansion

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China’s inflation numbers miss expectations, rising 0.2% in June

Fed Chair Powell says holding rates high for too long could jeopardize economic growth

How this year of elections is set to reshape global politics

New UK leader Starmer declares Rwanda deportation plan ‘dead and buried’

News Tips

Advertise With Us

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