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Message: <blockquote data-quote="Sara Moon" data-source="post: 11169" data-attributes="member: 525">3.     US-China Trade War Update (by [USER=1160]@Alice G[/USER])The story:The trade war was originally initiated last year in light of President Trump’s concerns over the trade deficit between the US and China, China’s attitude towards foreign competition and the theft of US intellectual property by Chinese businesses. At the beginning of March this year it appeared that significant headway was being made between the US and China to resolve the trade war through their bilateral negotiations. China was reportedly showing its willingness to import more American goods and to relax its rules surrounding foreign competition. The two powers were also deciding on a process to enforce a trade agreement.However, Trump upped the ante last week after accusing China of backtracking and ‘reneging’ on the progress and agreements that were being made during their talks. On Friday 10th May he announced that he would be raising duties on $200bn of Chinese imports from 10% to 25%. This US protectionism and further escalation of the trade war has led China to retaliate. On Monday 13th May, China announced that it would be placing higher tariffs on $60bn worth of American goods, increasing tariffs from 5% to 25% on approximately 5,200 American products effective from 1st June. China, as reported by the Economist, has previously adopted a more conciliatory strategy but this retaliation has demonstrated a more hardline approach. Trump has also stated that if there is no breakthrough in talks soon that he will impose 25% tariffs on a further $300bn goods, which would result in tariffs on virtually all Chinese imports.Despite Trump’s adulation at the position of the US in the trade war, the burden of the costs will fall to the American consumers. American importers will suffer the increased tariffs on Chinese goods and will hike prices as a result. American farmers will be even more severely hit which has resulted in Trump announcing that he will offer further aid to them.Talks between the leaders of the world’s two largest economies are due in the coming weeks.Impact on businesses and law firms:On Monday 13th May, stocks plunged significantly as businesses and markets fear that the trade war could escalate even further and last much longer than had previously been thought. The US stock market suffered its worst day since the start of 2019 and European stock markets hit their lowest levels in over six weeks too on Monday. Global stocks also fell to their lowest level since March. Apple’s, Caterpillar’s and Boeing’s stock prices also suffered. China’s currency and other emerging market currencies were also knocked. The Chinese renminbi was down 0.9% against the US dollar on offshore markets.Analysts have been quick to opine that market volatility in the coming weeks is highly likely and that there could well be a risk of a global recession depending on the length and further severity of the trade war. Uncertainty and volatility are the antithesis to global M&A and corporate activity. Businesses are hesitant to enter deals because of the difficulty in projecting future success and benefits of a particular deal. Although the consumers are more than likely to carry the burden of the costs as stated already, some businesses may have to absorb the costs to an extent which might inhibit their ability to raise funds too. Corporate law firms will suffer because of this projected decrease in M&A activity.However, uncertainty can be an opportunity for lawyers. The increase in tariffs will have significant impacts on the supply chains of many businesses who might look to relocate and source materials from elsewhere. Businesses will probably be keen to instruct their lawyers to perform due diligence on how they can further mitigate the impacts of the trade war dependent on their own operations too.4.     UK Coal Free Week (by [USER=525]@Sara Moon[/USER])The story:From 1 May to 8 May, UK had its first coal-free week since 1882, when the world’s first centralised public coal-fired generator opened at Holborn in London. Back in 2015, the UK government announced to phase out coal generation by 2025 and completely convert to coal-free electricity in order to reduce carbon emission which has been fatal to the climate. Coal-free week has been carried out as part of this initiative and has shown that coal has now become hugely irrelevant in generating electricity.Impact on businesses and law firms:Climate change is one of the key issues governments all around the world are currently grappling with and the UK has been a leading country in implementing climate protection measures. The Climate Change Act 2008 codified the government’s commitment to cut greenhouse gas emissions by 80% of 1990 level by 2050. Since April 2018, Energy and Carbon Report Regulations 2018, which have been implemented through the Companies Act 2016, have come into effect. These regulations have replaced the Carbon Reduction Commitment Energy Efficiency (CRC) Scheme and extended the obligations imposed on companies in regard to reporting carbon emissions and energy use. For example, the regulations, unlike the CRC scheme, require not only quoted companies but also unquoted companies to comply with reporting obligations on greenhouse gas emissions (unquoted companies are companies that are not listed and whose shares are not traded on a stock exchange and quoted companies are those whose shares are traded on a stock exchange). Also, they introduced various additional requirement on quoted companies of having to report on total energy use across all energy types. With legislative forces to protect climate being strengthened every year, law firms have key roles to play in ensuring that companies are complying with various reporting obligations and conducting business within the lawful rate of greenhouse emission.In addition to legislative measures, many companies are responding to consumers’ demand for environmentally responsible business activities and are issuing ‘green bonds’. Green bonds are bonds that raise funds for projects contributing to the environment, such as those promoting environmental protection measures, developing climate change solutions, and various other green projects. They first emerged in 2013 and the market for them has grown rapidly, with the issuance reaching USD 167.6bn in 2018. Companies are issuing these bonds to increase their market appeal and have used the proceeds to make their business activities more environmentally friendly. Investors benefit from investing in these bonds by enjoying tax-exempt income. Since these bonds are issued for specific purposes with tax advantages, there are various requirements to be met to issue them. This means that growing issuance of green bonds come with increasing demand from companies for legal advice on green financing. Thus, many law firms like White & Case have been increasingly investing in their Capital Markets Practice to advise on this newly emerging area.</blockquote>

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