The daily business briefing: September 9, 2019

Harold Maass
Boris Johnson in Dublin


China trade with U.S. dropped sharply in August

Customs data released Sunday showed that China's imports of U.S. goods fell by 22 percent in August from a year earlier in the latest sign that trade between the two countries has been hurt by their tariff war. China's exports to the U.S. dropped to $44.4 billion, a 16 percent decline from the same month last year. The two countries are the world's biggest economies, and the U.S. is China's biggest foreign market. Negotiators from the Trump administration and China are preparing for a new round of trade talks in October, after the latest round of new tariffs took effect on Sept. 1 and increased tensions. "The tit-for-tat escalation shows how unlikely a trade deal and de-escalation have become,” said Louis Kuijs of Oxford Economics in a report. [The Associated Press]


U.K. bill barring no-deal Brexit set to become law

Parliament's bill seeking to block a no-deal Brexit is set to become law on Monday over the objections of Prime Minister Boris Johnson. The legislation requires Britain to seek another Brexit extension from the European Union if lawmakers don't approve a withdrawal agreement by Oct. 19. Otherwise, the U.K. is scheduled to leave the trading bloc at the end of October. The opposition Labour Party and other groups also have said they would not back Johnson's call for early elections until he agrees to rule out a no-deal Brexit, which Johnson's rivals say would severely damage the British economy. Johnson last week expelled 21 members of his Conservative Party for defying him and joining opposition lawmakers seeking to prevent him from leading the country out of the EU even without a deal. [The New York Times]


Hurricane Dorian insured losses estimated in billions

Hurricane Dorian probably caused several billions of dollars in insured losses, German reinsurer Munich Re said Sunday. Although that damage estimate was just a "rough guess," it appeared likely that the destruction in the Bahamas and the lesser damage in North Carolina and Canada would drive up insurance rates, Munich Re board member Torsten Jeworrek said. Rival Swiss Re also said rates were likely to rise in hard-hit areas. Dorian lashed eastern Canada on Sunday and entered the North Atlantic, after killing at least 44 people in the Bahamas and two in the U.S., and leaving as many as 70,000 homeless. [Reuters, Vox]


Apple: Allegations of China labor-law violations mostly false

China Labor Watch said in a report released Sunday that Apple and its major supplier Foxconn had violated Chinese labor laws, but Apple on Monday denied most of the allegations. China Labor Watch, a watchdog based in New York, said that the $295 base salary at the biggest iPhone factory in Zhengzhou, China, was "insufficient to sustain the livelihood for a family living in Zhengzhou city." The report also found that in August half of the workers at the factory were temporary employees, exceeding the legal limit of 10 percent. Apple said it had looked into the allegations and "confirmed all workers are being compensated appropriately, including any overtime wages and bonuses, all overtime work was voluntary, and there was no evidence of forced labor." It acknowledged that the number of temporary workers exceeded company guidelines. [CNBC, Reuters]


U.S. stock futures mixed after China trade, U.S. hiring weaken

U.S. stock index futures were mixed early Monday after new data from China showed that trade with the U.S. fell in August. Futures for the Dow Jones Industrial Average and the S&P 500 were up by 0.3 percent and 0.1 percent, respectively, while those of the Nasdaq were down by 0.2 percent. China's trade numbers reinforced concerns about weakness in the world's second biggest economy, and increased pressure for Beijing to act to boost businesses. Expectations of stimulus efforts by central banks around the world helped lift markets despite Friday's disappointing U.S. jobs report. The European Central Bank is holding a policy meeting Thursday and is widely expected to cut interest rates. [CNBC, Bloomberg]