The comments from Nigel Green, chief executive of deVere Group, come after China fuelled hopes that a deal can be reached to end its trade war with the US after agreeing with Washington to roll back on some tariffs.

The deal to reduce trade tensions could encourage the International Monetary Fund (IMF) to revise up global growth forecasts next year.

Mr Green notes: “There has been an argument that in regard to the trade war, China was holding out, playing the long game and waiting for President Trump to leave office, before dealing with another administration.

“Whilst this argument might have held water before, I now believe this is not the case – and it is what is fueling recent developments in the trade war negotiations.”

He continues: “It is likely that China is currently fueling hopes to reach a phased agreement in the trade dispute with the U.S. and cancel tariffs as soon as possible because it will help President Trump’s re-election.

“His re-election would suit them for two major reasons.

“First, because they will assume that reaching a deal with Trump to end the damaging trade war will probably be easier than with some others. These include Elizabeth Warren, the potential Democratic rival, who could, say many supporters, win next year’s presidential election.  

“Ms Warren can be expected to be even tougher with China than Trump, and not only on trade, but on other difficult issues, including climate change and human and labor rights.

“And second, despite the trade war, Trump’s policies and rhetoric have proven to be strategically helpful to China in achieving its longer-term goals.  

“In many respects, President Trump has undermined Washington’s global credibility, international governance bodies and key alliances, and has been indifferent if not antagonistic towards major trading agreements.

“This all compromises America’s standing as the world’s primary superpower and it provides China with openings and opportunities it has previously never had in terms of global influence and setting international trade conventions.” 

The deVere CEO concludes: “The positive signs coming from Beijing and Washington on the trade talks between the world’s two largest economies have been welcomed by stock markets – some reaching all-time highs this week.

“Investors’ exuberance will grow further still should the deal be cemented, and also should Trump be re-elected.

“However, US investors should perhaps also question whether Mr Trump’s administration has, in fact, handed China a great strategic opportunity that could damage America’s preeminent superpower status in the longer-term and, therefore, its economic dominance.”

Celine Hartmanshenn, Global Head of Credit from Stenn Group, an international provider of trade finance, provides her thoughts on the deficit fall.

The trade gap between China and the US is shrinking, reflecting the overall softening of global trade volumes and hinting at the movement of supply chains out of China.

US macro indicators are mixed. Unemployment remains low and prices are in check. But consumer and business spending has cooled, manufacturing output is at its lowest level in a decade, and the services sector – which accounts for 80% of economic activity – is slowing down. The lingering uncertainty stemming from the trade war and sagging global economy has caused the outlook for 2020 to dim, with the expectation of the US limping along at 1-2% GDP growth. It’s not an outright recession, but it’s certainly not a boom either.

There’s no denying that the US-China trade war is a drag on the US economy. The disruption to supply chains is expensive for businesses, the tariffs now cover a wide range of goods, and because financial markets can’t quickly adjust, they are more volatile.

So, what’s the solution? Certainly not a tariff war with the EU. The US will implement its first tariffs on aircraft and agricultural goods in 2 weeks. The EU is likely to retaliate. The aftershocks could easily tip the US into recession.

The world will be watching this month as China and the US go back to the negotiating table. Whether they like it or not, these two economies are interconnected. China is dealing with massive overcapacity, high debt levels and a need for US dollars. And the US relies on China pumping these dollars back into the US to fund its debt.

HMRC had brought a case against the presenter under IR35 legislation after a crackdown on personal service companies, which she had used. Lorraine signed a contract to present ‘Lorraine’ in 2012, through the limited company - Albatel Ltd, which she runs with her husband.

HMRC argued that Kelly had claimed her agents’ fees as tax deductible and as an employee of ITV she was not entitled to do so. The deduction is only permitted for “theatrical performers” (classed as actors, musicians, singers, dancers or theatrical artists).

However, Lorraine Kelly claimed she was not an employee of ITV and was in fact an “entertainer” and her smiley, chatty persona was part of her brand. She stated to the tribunal that she played a version of herself on the show and drew comparisons to an actor appearing in a West End show for 12 months.

Lorraine Kelly argued that she was a freelancer, as she decides on the content of her show, does not receive sick pay or a pension from ITV and has no guarantee that her contract will be renewed.

The Ruling

Judge Jennifer Dean believed that Lorraine could be classed as a "theatrical artist", which would mean any payments to an agent would be allowed as a tax-deductible expense.

The judge also stated: "We did not accept that Ms Kelly simply appeared as herself - we were satisfied that Ms Kelly presents a persona of herself, she presents herself as a brand and that is the brand ITV sought when engaging her.

"All parts of the show are a performance, the act being to perform the role of a friendly, chatty and fun personality.

"Quite simply put, the programmes are entertaining, Ms Kelly is entertaining, and the 'DNA' referred to is the personality, performance, the 'Lorraine Kelly' brand that is brought to the programmes."

She added: "We should make clear we do not doubt that Ms Kelly is an entertaining lady but the point is that for the time Ms Kelly is contracted to perform live on air she is public 'Lorraine Kelly'.

"She may not like the guest she interviews, she may not like the food she eats, she may not like the film she viewed but that is where the performance lies."

What does this mean?

Having lost the £1.2m tax case HMRC has stated it was “disappointed”.  However, it does show the importance of looking into professional IR35 advice and protection. It is advisable to ensure that IR35 reviews are conducted for any contract that a contractor engages in.

(Source: Gorilla Accounting)

The price of bitcoin plummeted to under $6,000 in the first half of August 2018 before ticking up again days later. Here is how cryptocurrency experts have reacted to the recent price moves.

This afternoon reports indicate Theresa May, in her speech regarding Brexit negotiations, says the UK “cannot possibly” remain part of the European single market. In addition, the PM has stated that parliament will also get to vote on the final agreement with the EU.

Following the speech, Finance Monthly has heard commentary from the below sources, who have provided their insight into the developments.

Jake Trask, currency analyst, UKForex:

Sterling rose today as the markets welcomed the content of Theresa May’s speech outlining the framework of how the UK will approach its negotiations to exit the EU. The markets appear to have taken heart from the prime minister’s reassuring words, signalling that the UK government will do all it can to avoid a cliff edge scenario, where at the end of the two year process we default to WTO tariffs.

The PM said her preferred approach would be to implement the changes in a staggered manner. This controlled method of exit appears to have calmed market fears, with the proxy for Brexit sentiment, the pound, rising two cents against the dollar throughout the day.

Bruce Johnston, Head of International Finance, Morgan Lewis:

There are no plans for an overall transitional deal, but there may be interim arrangements to minimise disruption for certain sectors of the economy.

Free trade agreements with the EU and the USA will take many years to negotiate (long after the UK leaves the EU).  Serious negotiation of free trade agreements cannot start until the exit agreement with the EU is signed (and ratified by the 27 EU countries).

We await the court case in Dublin which (amongst other things) may determine if the UK remains in EFTA after it leaves the EU. It appears that the UK government does not think so, by May’s statements on the single market and the customs union.

Mark Boleat, Policy Chairman, City of London Corporation:

The Prime Minister’s speech today added a degree of clarity for the Government’s Brexit strategy.

We welcome the Prime Minister’s ambition to retain the greatest possible access to the single market, which is important to the UK’s financial and professional services industries.

Passporting rights and access to leading talent – facilitated by the single market – has, in part, helped make Britain the world’s leading financial centre, but the Government fully recognises that protecting these vital industries is a priority.

Trade between the UK and the European Union has helped make our country prosperous. We welcome that Government recognises the value and importance of EU companies seeking access to the services of the City of London.

We also welcome the decision to trade more with existing and new international partners – this has the potential to be the prized trophy of the UK’s decision to leave the EU.

The City has been vocal on the need for a transitional arrangement from the time Britain formally leaves the EU and when the new arrangements come into effect. Following today’s announcement, this becomes an even greater necessity. We would like to see a transitional agreement announced as soon as possible.

Government’s phased implementation plan must avoid a cliff-edge and will be beneficial for firms across all sectors, especially financial and professional services firms. The Government must stick to this commitment.

Britain has long been a magnet for global talent. To continue the sector’s success, with 12% of City workers made up of European staff, it is important the flow of leading talent to the UK continues. We support the wish to maintain the rights of EU citizens currently working in the UK.

Charles Brasted, Partner, Hogan Lovells:

For those who have been listening carefully to Theresa May and the Government in recent months, today was the day when the PM had to face up to the implications of what has already been said.  What the PM has done is to reaffirm the primacy of key commitments to taking back control of laws, courts and borders — and to admit  that that necessarily rules out membership of the EU's clubs.

Mrs May's aspiration is a bespoke deal that emphasises access, not membership, that seeks to be part of a customs union – but not on the terms of the existing customs union, which preclude the UK striking its own trade deals — and that is based on on-going regulatory consistency and reciprocity. The impression from the EU is likely to be that this is precisely the cherry picking that they have warned against. However, the EU has shown itself able to agree sector-specific arrangements based on these principles and the UK's answer must be to show that it is seeking an agreement that preserves the best of the relationship for the benefit of both sides.

Mrs May has also been keen to reassure businesses and others by highlighting the intention for continuity of laws and rules immediately post-Brexit and for an "implementation phase" that would deliver the full future relationship over time through a smooth and ordered process of realignment.

Every one of the aspirations expressed by the UK Government today will demand exceptional political skill to negotiate and will be complex to implement legally and commercially. The objectives are now clear – the path towards them is uncharted.