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Trump on trade; Brexit jitters; End of the soup wars

London (CNN Business)1. Trump threats: President Donald Trump appears to be shutting the door on a ceasefire in the trade war with China just days before a crucial summit.

Trump told the Wall Street Journal that it was "highly unlikely" he would accept an offer by Chinese President Xi Jinping aimed at averting higher tariffs on more than $ 200 billion of Chinese goods in January.
He also warned he would put yet another round of tariffs on Chinese goods if the two leaders fail to broker an end to the dispute when they meet later this week in Buenos Aires, Argentina, on the sidelines of the G20 summit.
    "If we don't make a deal, then I'm going to put the $ 267 billion additional on," said Trump in the interview, adding the tariff level could either be 10% or 25%.
    Trump said the tariffs could hit Apple products imported from China including iPhones. Shares in Apple (AAPL), which have already fallen 25% since early October, moved lower in extended trading.
    2. Brexit worries: Trump also weighed in on Brexit, warning that the deal negotiated by Prime Minister Theresa May could make it difficult for the country to trade with the United States.
    The comments helped push the pound 0.7% lower against the dollar on Tuesday. The deal's fate could be decided as soon as December 11, when May will seek to push it through the parliament.
    The United Kingdom has previously expressed a desire to negotiate a free trade deal with the United States.
    3. Market overview: US stock futures were lower on Tuesday. Stocks in Asia and Europe were mixed.
    Kit Juckes, an analyst at Societe Generale, said that a lack of economic news was encouraging investors to focus on the G20, Brexit and Italy's budget dispute with the European Union.
    "If I have to weight these three topics, the G20 meeting is the one that is both imminent [and] most likely to move markets," he said. "I think the underlying tone is pessimistic."
    The Dow closed up 1.5% on Monday. The S&P 500 gained 1.6% and the Nasdaq added 2.1%. Tech stocks led the way higher, with Amazon (AMZN) and Twitter (TWTR) climbing more than 5%.
    4. End of the soup wars: An intense fight for control of Campbell Soup (CPB) is over.
    For months, activist investor Daniel Loeb's hedge fund Third Point has been attempting to overhaul the soup company's board and install its own directors.
    On Monday, both sides agreed to end the proxy fight and expand the Campbell board from 12 to 14 members. Two of the five nominees suggested by Third Point will be added to the board.

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    5. Company news: Cracker Barrel (CBRL) will release earnings before the open. Salesforce (CRM) will follow after the close.
    Facebook (FB) faces a potential showdown with lawmakers in London. Representatives from nine countries have gathered for an international hearing on disinformation, starting at 5:30 a.m. ET.
    There is a chance that UK lawmakers will use the event to reveal internal documents Facebook has been trying to keep from the public.

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      6. Coming this week:
      Tuesday
      — Cracker Barrel (CBRL) and Salesforce (CRM) earnings
      Wednesday
      — J M Smucker (SJM), Box (BOX) and Tiffany (TIF) earnings; US GDP second estimate
      Thursday
      — Dollar Tree (DLTR), Abercrombie & Fitch (ANF) and HP (HPQ) earnings; Fed notes released
      Friday
      — G20 begins in Argentina

      Trump dims hopes of China trade deal with fresh tariff threat on Apple phones

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      Washington (CNN Business)President Donald Trump appears to be shutting the door on a temporary ceasefire in an ongoing tit-for-tat trade war with China just days ahead of an upcoming summit in Argentina.

      The President told the Wall Street Journal in an interview published Monday that it was “highly unlikely” he would accept an offer by Chinese leader Xi Jinping aimed at averting Trump’s plan to raise tariffs on more than $ 200 billion of Chinese goods to 25% in January.
      He also warned once again he was poised to slap a third round of tariffs on Chinese goods if the two leaders fail to broker an end to the trade rift when they meet later this week in Buenos Aires, Argentina, on the sidelines of the G20 summit.
        “If we don’t make a deal, then I’m going to put the $ 267 billion additional on,” said Trump in the interview, adding the tariff level could either be 10% or 25%.
        Trump said in the interview that could include tariffs on Apple products imported from China, including iPhones and laptops. Apple’s stock fell 1.5% in after-hours trading, erasing earlier gains from the day.
        “Maybe. Maybe. Depends on what the rate is,” the president said. “I mean, I can make it 10%, and people could stand that very easily.”
        The tariffs have drawn complaints from American businesses, who are responsible for paying the import duties. It’s also spurred concerns about renewed inflation, just as the Federal Reserve is set to raise interest rates in December.
        More than 100 S&P companies have already pre-emptively telegraphed during the third quarter earnings calls the damage further tariffs would impose on the US economy. Multiple companies including Walmart, the country’s biggest retailer, have warned that prices on everyday goods like shampoo, detergents and paper goods — such as napkins — will get more expensive for consumers.
        In the lead-up to this weekend’s leaders meeting, Trump surrogates have continuously warned Beijing negotiators that threats by the President should be taken seriously.
        Vice President Mike Pence said earlier this month that Trump wasn’t in any rush to end the trade war and was willing to “more than double” the tariffs it has already placed on $ 250 billion in Chinese goods. The United States “will not change course until China changes its ways,” Pence said in his speech at the Asia-Pacific Economic Cooperation summit in Papua New Guinea.
        The upcoming meeting is the only imminent opportunity for a direct encounter between Trump and Xi before the January 1 deadline, and investors are eagerly looking for signs for a truce between the two sides.
        Speaking on the South Lawn with reporters, Trump hedged bets on any possible deal making with his Chinese counterpart. “It could happen. They have to treat us fairly,” he said.
          While so far much of the attention on the undo harm of the existing tariffs has fallen on China, political scientists and economists also warn there could be deeper ramifications for American corporations, if the Chinese opt to restrict American investment.
          “A lot of the problem for business is uncertainty,” said David Dollar, a senior fellow in the John L. Thornton China Center at the Brookings Institution and a former economic and financial emissary to China for the Treasury Department under President Barack Obama. “They can live with whatever policy regime there is whether we are taxing everything from China or not. They just hate the uncertainty.”

          How Black Friday shopping could change if Trump’s trade war goes on

          New York (CNN)Next year's Black Friday deals are at stake in President Donald Trump's trade war with China.

          In fact, Americans starting their holiday shopping this week are likely to be picking up some items that are already subject to Trump's tariffs.
          Since the tariffs went into effect at the end of September, handbags, perfumes, wallets, hats and fur coats are among the 5,700 items from China that have been subject to a 10% tariff -- along with gifts for the sports enthusiasts in your life, including ski mittens, bikes, baseball gloves and golf bags. Cashmere imported for sweaters doesn't escape the tax either.
            Fortunately for this year's shoppers, prices likely won't be going up yet. American importers pay the duty, and most items on the floor for Black Friday were already priced before the tariffs kicked in, said Rick Helfenbein, president of the American Apparel and Footwear Association.
            "Shoppers may be pardoned this Thanksgiving season, but they'll be paying more come spring," he added.
            Next year could be very different if Trump and Chinese President Xi Jinping fail to come to a trade agreement before the end of the year, when Trump says he'll escalate the 10% tariffs to 25%.
            "Once you get to that 25% mark, that's when you're going to see more price increases for the end consumer," said Christopher Shaker, a consumer products analyst and partner at RSM, an audit, tax and consulting firm for middle market companies.
            Big box retailers Walmart and Target have already warned that the tariffs could lead to higher prices.
            Trump is scheduled to meet with Xi next week on the sidelines of the G20 summit in Argentina to discuss trade.
            But an agreement is far from certain. Earlier this week, Chinese negotiators canceled preliminary meetings with their US counterparts ahead of the summit. On Tuesday, US Trade Representative Robert Lighthizer ramped up the pressure on China even further by releasing an updated report showing Beijing has done little to fix its unfair practices.
            The Trump administration has also made it a priority to aggressively go after China for engaging in intellectual property theft and forced technology transfers. Before imposing the tariffs on $ 200 billion of goods in September, Trump put taxes on $ 50 billion of Chinese goods -- but those earlier rounds did not include many consumer goods.
            China has retaliated with tariffs on $ 110 billion in US products and is likely to respond with more if the United States goes ahead with the increase in January.
            American businesses and lawmakers on both sides of the aisle agree the China trade issues should be addressed -- but not everyone believes that tariffs are the right way. Some manufacturers and retailers say the duties could lead to job losses and higher prices for consumers.
            Trump has also suggested he could move ahead with with imposing another round of tariffs on an additional $ 267 billion in goods if no agreement can be reached, effectively covering all Chinese exports to the United States.
            The move would tax even more consumer goods that come from China, including televisions, Apple watches, Air Pods, and Fitbits.
              So far, a relatively small amount of apparel goods from China have been hit with tariffs, but a new tranche would be significant. In total, the United States receives 41% of its apparel imports from China, 80% of accessories, and 73% of footwear, said Helfenbein.
              "It's almost like this year and next year are two different worlds," he said.

              The trade war is pushing business out of China, but not into America

              Hong Kong (CNN Business)US tariffs are prompting companies to move some production out of China, but it's not going where President Donald Trump would prefer.

              The trade war has made more than $ 250 billion of Chinese exports more expensive for Americans — from leather belts to refrigerators to motorcycles. The disruption to the world's biggest trading relationship has electronics manufacturers, industrial machinery makers and fashion brands working on shifting some of their assembly lines.
              "We are flooded by inquiries," said William Ma, group managing director of Kerry Logistics, a Hong Kong-based firm that helps companies around the world manage their supply chains. "It all happens after the trade war."
                Many firms are keeping much of their operations in China, which offers a giant domestic market and advantages that businesses struggle to find elsewhere. But those that are moving aren't flocking to the United States. Instead, they're looking to transfer work to other Asian countries.
                A port in Qingdao, Shandong province, China. US tariffs have made more than $  250 billion of exports from China more expensive, prompting some companies to move production out of the country.

                In a recent survey by two American chambers of commerce in China, one third of the companies who responded said they were looking to switch to production outside of China as a result of the trade war. Only 6% said they were considering moving business back to the United States.

                Asia, not America

                In some industries, the tariffs have accelerated the shift of manufacturing from China to countries in Southeast Asia, where labor is cheaper.
                Steve Madden (SHOO), whose handbags have been hit by a 10% tariff, says it's moving a significant chunk of its production to Cambodia and other countries. The company currently makes about 85% of its handbags in China, a figure that could drop to 50% or 60% next year.

                "The shift is almost entirely due to the US-China trade conflict," Steve Madden CEO Ed Rosenfeld told CNN's Alison Kosik. "We have to prepare as though tariffs will be the new normal, but we are hopeful that cooler heads will prevail."
                Consumer tech brands are also looking to Southeast Asia. Hugh Lo, vice president of the consumer division at Taiwan's New Kinpo Group, which makes electronics for clients such as Toshiba (TOSBF) and Samsung (SSNLF), says he has been inundated with inquiries from companies keen to transfer manufacturing out of China.
                A year ago, his team got about one inquiry a week, he said. Now, it's "maybe 30 times more."
                Workers arranging shirts at a factory in Hanoi, Vietnam in 2014. Trade tensions have accelerated the shift of manufacturing from China to countries in Southeast Asia, where labor is cheaper.

                Lo said that TV and gaming device makers have been particularly interested in relocating. He declined to name individual companies.
                Big industrial suppliers have been hit hard, too, with many of their products subject to the new tariffs.
                Toshiba Machine said it's moving some of its production of molding equipment in Shanghai overseas, and machinery maker Komatsu (KMTUY) told CNN that it plans to shift some of its assembly lines to Japan or Mexico.
                A Komatsu excavator displayed at a construction trade fair in Munich in 2016. The machinery maker told CNN that tariffs could cost its business about $  35 million.

                Nathan Resnick, whose San Diego-based startup Sourcify helps thousands of businesses place orders with manufacturers across Asia, has also noticed a clear shift away from China this year.
                In January, Chinese factories supplied as much as 90% of the orders his company helped place in industries like textiles and household appliances. Now, he estimates that figure has plummeted to about 50%, with the focus moving to countries like Thailand, Vietnam and the Philippines.
                "It's really just been recently," Resnick told CNN. "I didn't go to any of those countries last year."

                Leaving China isn't easy

                A lot of companies are unwilling to leave China, which has a range of advantages for manufacturing industries that are spread across Asia.
                Many of the products US firms export from China have to fit exact requirements, necessitating specialized equipment and highly trained workers, according to Harley Seyedin, president of the American Chamber of Commerce in South China.
                "Their supply chains cannot be adjusted in short order," Seyedin told CNN.
                Employees at a facility of Cal-Comp Technology, a unit of New Kinpo Group, in the Philippine city of Lipa. The contract electronics manufacturer is expanding in the Philippines and Thailand to keep up with customers' demands to shift manufacturing away from China.

                China also boasts better roads, ports and power grids than most Southeast Asian countries.
                "China just has such a great infrastructure," Resnick said. "You go to some of these areas in the Philippines or Vietnam, and the ground surrounding the factory is not developed whatsoever."
                Starting from scratch in another country is a major step.
                Executives estimate it could take up to two years to build a new factory. Then there are the challenges of navigating the local bureaucracy and training new staff to meet the company's standards.
                "It takes time," said Ma at Kerry Logistics. "Things cannot be done overnight."
                His company is rushing to help businesses move their supply chains to other Asian countries.
                "We definitely need to hire more people, rent more warehouses, buy more trucks," he said.
                Kerry Logistics says it has been "flooded by inquiries" this year to help companies adjust their supply chains.

                Businesses that want to move their orders outside China face another problem: finding factories in the region that can accept them.
                "I have factories that we work with in Vietnam that are booked up for the next year," Resnick said. "Their production lines are full. And so you really do, at times, have to hunt and find factories that still have capacity."
                  But when it comes to switching to US-based suppliers, there's little interest.
                  "That's not even been a consideration for any of the companies that we work with," said Resnick.

                  Pence, China’s Xi trade tough talk at Pacific summit

                  Vice President Mike Pence and Chinese leader Xi Jinping exchanged barbs and tough talk in competing speeches to world leaders Saturday, with Pence warning the United States could double its tariffs on Beijing unless it bowed to U.S. demands.

                  Pence, speaking at the Asia Pacific Economic Co-operation (APEC) summit in Port Moresby, Papua New Guinea, showed no hint of compromise. He said the U.S. would not change its course until China changes its ways.

                  “We have taken decisive action to address our imbalance with China,” Pence said. “We put tariffs on $ 250 billion in Chinese goods, and we could more than double that number.”

                  “We have taken decisive action to address our imbalance with China. We put tariffs on $ 250 billion in Chinese goods, and we could more than double that number.”

                  — Vice President Mike Pence

                  China has retaliated with tariffs of its own on U.S. goods.

                  Washington is demanding that China stop intellectual property theft against U.S. companies, slash a $ 375 million trade gap, cut industrial subsidies and improve access to Chinese markets.

                  President Trump was not at the summit, but will meet with Jinping in at the G-20 summit in Argentina that begins later this month, Reuters reported.

                  Pence also took aim at China’s construction of manmade islands in the Pacific and its “Belt and Road Initiative,” which involves billions of dollars of infrastructure development in Asia, Europe and Africa.

                  He called many of the projects low-quality ventures that saddle developing nations with loans they can’t afford, while saying the U.S. is a better partner.

                  “Know that the United States offers a better option. We don’t drown our partners in a sea of debt, we don’t coerce, compromise your independence,” Pence said. “We do not offer a constricting belt or a one-way road. When you partner with us, we partner with you and we all prosper.”

                  Pence has spent nearly a week attending Asian summits assailing China’s military and economic influence, the Wall Street Journal reported.

                  China's President Xi Jinping speaks during the APEC CEO Summit 2018 in Port Moresby, Papua New Guinea on Saturday.

                  China’s President Xi Jinping speaks during the APEC CEO Summit 2018 in Port Moresby, Papua New Guinea on Saturday. (Associated Press)

                  Xi spoke before Pence, calling protectionism “shortsighted” and “doomed to fail.”

                  He expressed support for a global free trading system and said nations face a choice of cooperation as unilateralism spreads.

                  “History has shown that confrontation, whether in the form of a Cold War, hot war, or trade war will produce no winners,” Xi said.

                  The Associated Press contributed to this report.