America began an investigation into France’s planned digital-services tax. The Trump administration says the 3% levy on the French revenues of big internet firms unfairly targets American companies like Google and Amazon. Its probe could result in America imposing tariffs or other trade restrictions. Several European countries are mulling digital taxes, though all say they would prefer a global deal—which the oecd, a club of rich countries, is trying to broker.
The Trump administration said it would issue licences allowing American companies to sell their products to Huawei, a Chinese technology firm, provided that the sales do not threaten national security. In May, after trade talks with China collapsed, America had blacklisted the Chinese telecoms firm over security concerns related to its links to the Communist Party of China. President Trump agreed to allow Huawei to resume sales to American firms last month.
America’s stockmarkets soared after Jerome Powell, the chairman of the Federal Reserve, hinted that the central bank is looking to cut interest rates this month. Investors piled into shares after Mr Powell cited concerns that the trade war with China and a global slowdown could hurt growth in America. The s&p 500 index of shares touched 3,000 for the first time.
Mr Powell also warned that plans by Facebook to build a digital currency called Libra raise “serious concerns”. The central banker told America’s House of Representatives that Facebook should address fears about privacy, money laundering, consumer protection and financial stability before moving forward with the project. Several executives at the social network are scheduled to be questioned by Congress later this month.
A profit warning from BASF, the world’s largest maker of chemicals, weighed heavily on the German stockmarket. The company slashed its forecast for full-year earnings by 30%. In response its share price slid by 5%. The company blamed a global economic slowdown, caused by the trade war between America and China, as well as a “particularly strong” downturn in car manufacturing, for the downgrade.
A Brazilian judge ordered Vale, a mining giant, to pay full compensation for damage caused when one of its dams in the north of the country broke in January, killing at least 248 people. Vale must stump up for all the effects of the disaster, including the cost of the economic hit to the region. The judge said it was still not possible to calculate a final figure for the total amount Vale will have to pay.