The world trade environment

The world trade order is currently changing due to the power struggle among countries. The world is focusing on the trade negotiation between the US and China. (According to FT report)The US leading trade negotiators will travel to China to resolve the remaining issues in talks to end the trade tension between the two countries; the US trade representative, Robert Lighthizer, and the Treasury secretary, Steven Mnuchin, are expected to meet the Chinese vice-premier, to seal the final deal by the end of next month. However, it is still uncertain that the two countries will eventually seal a final deal, the Tuesday's market was down due to the report on China pushing back against American trade demands. Besides the trade battle with China, the US has also pressured other countries on trade, including Germany and Japan. The US president has said in public several times that German cars are a threat to the US national security. And Lighthizer blamed his boss's decision of pulling out of the Trans-Pacific Partnership, and wanted to speed up its trade negotiation with Japan since the US farm exports to Japan have sunk. For countries which are dealing with the US, they can try to run out the clock in the hope that the US domestic power struggle (especially 2020 presidential campaign) will make the administration easier to deal with.

While the US is negotiating new trade deals with other countries, Britain is negotiating with the EU about how the UK exits the EU. There has been a deal between the UK government and the EU; however, this deal has not got approved by the UK Parliament, this leads to a very difficult position for the UK government. The UK government does not have sufficient within the Parliament, this can weaken the UK government's ability and confidence when negotiating with the EU, since the government does not know if the negotiation result will win the Parliament approval and the EU can potentially use this as a counter argument (as the deal with the UK has greater uncertainty) in the negotiation.