The Economist

8 The world this week The EconomistJuly 21 st 2018

The IMF warned that the

tariffs on imports threatened

by both President Donald

Trump and his tradingpartners

could lower the annual growth

rate ofthe global economy by

0. 5 percentage points by 2020.

The fund left its forecasts for

global economic growth in

2018 unchanged.

Jerome Powell the chairman

of the Federal Reserve  testi-

fied to lawmakers about the

health ofthe American econ-

omy. Solid growth and stable

inflation should he said allow

the Fed to raise interest rates

gradually. His comments

helped the dollar reach a

three-weekhigh against a

basket ofothercurrencies.

The European Union and

Japan signed the world’s

largest bilateral trade pact. The

EconomicPartnership Agree-

ment is the result offive years

of negotiation. The Japanese

will gradually lowertheir

tariffs on European wine meat

and cheese and the EUwill

drive down levies on imports

of cars and vehicle parts from

Japan.

Plane despair

Bosses from Rolls-Royce  an

aircraft-engine maker and

Airbus  a plane manufacturer

again voiced theirfrustration

at disarray in the British gov-

ernment overplans for leaving

the EU. Rolls-Royce warned

that a hard Brexit would hit

competitiveness. Airbus said

its contingencyplans fora

disorderlyexit were well-

advanced.

The EU’s competition commis-

sion fined Google € 4. 3 bn

($5bn) for abusingthe domi-

nance ofits Android operating

system forsmartphones. That

is the largest antitrust penalty

everimposed by the regulator.

The authorities concluded that

the tech firm forced device-

makers to pre-install its apps

and services and allowed

Google 90 days to end its

“illegal conduct”. The com-

pany said it would appeal

against the decision.

Goldman Sachs  an invest-

ment bank confirmed that its

longtime chiefexecutive Lloyd

Blankfein will step down in

September. David Solomon

the bank’s co-chiefoperating

officer will take his place. The

bankalso reported a 40 % rise

in its second-quarterprofits.

All sewn up

Deutsche Bank  Germany’s

biggest lender surprised in-

vestors with a forecast-busting

earnings preview. It expects to

report a profit ofaround

€ 400 m ($ 477 m) in the second

quarter more than double

analysts’ projections. The

news was so good that the

bankmade its announcement

nine days ahead ofschedule. It

is an encouragingstart for

Christian Sewing its fourth

chiefexecutive in as many

years and ends a run ofbad

earnings figures. The bank’s

shares rose by 7 %.

Amazon claimed that Prime

Day  its 36 - hourperiod of

discounts was the biggest

shoppingevent in its history.

Members ofthe company’s

subscription service bought

over 1 00m products despite

website crashes in North

America and staff goingon

strike in Europe. The com-

pany’s shares rose to a record

$ 1  856 on July 18 th.

Novartis  a drugmaker froze

prices for its medicines in

America. The move followed

criticism ofrisingdrugs prices

from Mr Trump. Pfizer  anoth-

erpharma company recently

delayed price rises.

Netflix  an online-streaming

service reported worse-than-

expected subscribergrowth in

the second quarterof 2018. It

added 5.2m newsubscribers

compared with expectations

of 6. 2 m. The company’s shares

dipped by 14 % on the news

before recoveringsomewhat.

Bosses behaving badly

Elon Musk  the billionaire

founder ofTesla a car com-

pany apologised to Vern Uns-

worth a British diver for call-

inghim “pedo guy” on Twitter.

Mr Unsworth who assisted

with the rescue of 12 boys and

theirfootball coach from a

cave in Thailand had ridiculed

MrMusk’s offerofa mini-

submarine to help with the

operation.

It emerged that American

authorities are investigating

allegations that Uber  a ride-

hailing firm discriminated

against women in hiringand

pay. This followed reports that

Uber’s head ofhuman re-

sources had resigned follow-

ingan internal investigation

and that employees had filed

complaints against its chief

operatingofficerformaking

insensitive comments about

women and minorities.

The International Energy

Agency lamented a pause in

the shift to clean energy.

Global investment in renew-

able powerfell by 7 % to

$ 298 bn last year. The share of

fossil fuels in energy invest-

ment increased for the first

time since 2014.

An abrupt ending

China’s biggest budget film

“Asura”  was pulled from

cinemas aftera spectacular

flop on its openingweekend.

The film cost $ 112 m to make

but earned only$ 7 m. It had

been part-backed by Alibaba

an e-commerce giant.

Business

For other economic data and

news see Indicators section