US treasury secretary accuses Beijing of trying to damage global economy, as US and China roll out tit-for-tat port fees – business live

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Close Brothers lift motor finance scandal bill to £300m

UK lender Close Brothers has put aside an extra £135m to deal with the motor finance scandal, as lenders grapple with the rising cost of potential compensation claims.

The company is one of many lenders exposed to an ongoing scandal in which drivers were overcharged for loans as a result of commission paid to car dealers. It has now made a total provision of £300m to deal with potential costs.

It follows a similar warning from Lloyds Bank yesterday, which announced it had made a further £800m provision to deal with the motor finance scandal, taking its total to almost £2bn.

Both lenders have updated their estimates following a consultation paper by the Financial Conduct Authority. But Close Brothers said this morning:

“[The group] does not believe the redress methodology proposed by the FCA appropriately reflects actual customer loss or achieves a proportionate outcome.

“...the FCA’s proposed approach to assessing unfairness does not align with the legal clarity provided by the supreme court judgement in respect of the “Johnson” case, which confirmed that the test for unfairness is highly fact specific and must take into account a broad range of factors. The group will continue to engage with the FCA in respect of these points.

This summer the supreme court sided with one of three consumer complaints related to car finance, with judges concerned about “unfair” treatment by car lenders towards Mark Johnson, a 35-year-old factory worker from south Wales.

An FCA spokesperson said:

“Many motor finance lenders did not comply with the law or the rules. It’s time their customers get fair compensation. Recent court judgments show that liabilities exist no matter what.

“We believe our scheme is the best way to settle the issue for both consumers and firms, and alternatives would be more costly and take longer. We recognise not everyone will get everything they would like. But it’s vital we draw a line under the issue so a trusted motor finance market can continue to serve millions of families every year.”

Shares in Close Brothers, which is listed in London, have dropped by 2% in early trading.

Pound falls after US jobs report

The pound is weakening this morning after new data showed a rise in UK unemployment, and a drop in numbers on company payrolls.

The UK jobless rate rose to 4.8% in the June-August quarter, the Office for National Statistics has reported, its highest level since 2021.

The ONS’s data also shows that regular wage growth dropped 4.7% in the quarter, down from 4.8% in the previous three months, a three-year low.

Adding to the disappointing picture, the number of payrolled employees is estimated to have fallen by 10,000 in September, and by 100,000 over the last year.

In response, the pound has dropped by over half a cent against the US dollar to $1.3275, close to a two-month low.

Chris Beauchamp, chief market analyst at IG, says:

“This morning’s data provides little in the way of good news for the struggling UK economy, and puts more pressure on the Bank of England and the government to act to provide more support.

Sterling looks at the mercy of continued US dollar strength, both from a data outlook and as short positioning in the greenback continues to unwind.”

China has taken countermeasures against five U.S.-linked subsidiaries of South Korean shipbuilding firm Hanwha Ocean, Reuters reports.

Organisations and individuals within China are prohibited from engaging in any transactions, cooperation or related activities with these entities, the Chinese commerce ministry said on Tuesday.

China: If forced, we will fight to the end

China’s Ministry of Commerce has urged the US to work with Beijing, and to show sincerity in trade talks.

A spokesperson for the ministry said today:

“The U.S. side cannot seek talks on one hand while threatening to introduce new restrictive measures on the other. This is not the right way to get along with China.

“China’s position concerning tariff or trade wars has been consistent -- if forced to fight, China will fight to the end, and for talks, the door is open.

Japan’s Nikkei index has closed for the day, down 2.58%, it’s biggest one-day fall since the market turmoil in April when Donald Trump kicked off his trade war.

Japanese investors are nervous about the domestic political situation, following a split between the ruling Liberal Democratic Party and the smaller Komeito party.

Last Friday, Komeito quit their coalition, a move which makes it harder for the LDP’s new leader, Sanae Takaichi, to become Japan’s next prime minister.

The US also began imposing tariffs on imported lumber, kitchen cabinets and some furniture today.

The new levies, announced by Donald Trump last month, will introduce a 10% tariff on imports of softwood lumber, while duties on certain upholstered furniture and kitchen cabinets start at 25%.

The White House claimed the duties will boost US industries and protect national security. But, as they’re paid by the importer, they risk pushing up the cost of building and fitting out a home.

Trump and Xi still on track for meeting, Bessennt says

Scott Bessent has also revealed that US president Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October

Spealing to Fox Business, Bessent said:

“The 100% tariff does not have to happen. The relationship, despite this announcement last week, is good. Lines of communication have reopened, so we’ll see where it goes.”

“President Trump said that the tariffs would not go into effect until November 1. He will be meeting with Party Chair Xi in Korea. I believe that meeting will still be on.”

Bessent also claimed that “We have substantially de-escalated,” – shortly before appearing to re-escalate by accusing China of trying to damage the the global economy.

US and China to roll out tit-for-tat port fees today

A cargo ship sailing into the port in Qingdao, in China's eastern Shandong province, on Monday. Photograph: AFP/Getty Images

A new front has opened up in the bubbling US-China trade tensions today too – at the two country’s ports.

From today, the US and China will begin charging additional port fees on ocean shipping firms.

China said today it had started to collect the special charges on U.S.-owned, operated, built, or flagged vessels. Chinese-built ships would be exempted from the levies, though.

The US is also scheduled to start collecting similar fees today on ships linked to China. This is an attempt to shake China’s grip on the global maritime industry and bolster U.S. shipbuilding.

Athens-based Xclusiv Shipbrokers Inc said in a research note:

“This tit-for-tat symmetry locks both economies into a spiral of maritime taxation that risks distorting global freight flows.”

Introduction: Scott Bessent accuses China of trying to damage global economy

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Tensions between the US and China continue to swirl, even though fears of a renewed trade war cooled on Monday.

US treasury secretary Scott Bessent has thrown more fuel on the fire overnight, by accusing China of trying to hurt the world’s economy.

Bessent criticised Beijing for imposing new export controls on rare earths last week – a move which riled president Trump – suggesting the move would backfire.

He told the Financial Times:

“This is a sign of how weak their economy is, and they want to pull everybody else down with them. Maybe there is some Leninist business model where hurting your customers is a good idea, but they are the largest supplier to the world.

If they want to slow down the global economy, they will be hurt the most.”

Bessent’s comments come as the mood in the markets turns sour again, following a rally on Monday after Trump seemed to calm a situation which he inflamed on Friday by threatening China with 100% tariffs

Stock markets across the Asia-Pacific region are mainly in the red today, with China’s CSI 300 index down 0.6%, Hong Kong’s Hang Seng losing 1.2% and Japan’s Nikkei dropping by 2.1%.

Cryptocurrencies are also weakening, with Bitcoin dropping by 2.7% and ether shedding 5%.

The row threatens to overshadow the annual meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) which are taking place in Washington DC this week.

The agenda

• 7am BST: ONS labour market

• 8am BST: UK grocery inflation data

• 9am BST: IEA’s monthly oil market report

• 2pm BST: IMF World Economic Outlook press briefing

• 3.15pm BST: IMF’s Global Financial Stability Report