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LONDON — The pound slumped more than one per cent versus the dollar and euro Wednesday as Britain's government moved to extend the suspension of parliament, increasing the likelihood of a no-deal Brexit.

Britain's currency slid 1.1 per cent to $1.2157, while the euro bought 91.23 pence. Sterling later recovered to above $1.22 but remained heavily down on late Tuesday.

The pound's plunge boosted London's benchmark FTSE 100 index, which features numerous multinationals earnings in dollars.

"The pace of sterling's drop demonstrates yet again the currency's susceptibility to Brexit fears," said Han Tan, market analyst at FXTM trading group.

British Prime Minister Boris Johnson on Wednesday announced that the annual suspension of parliament would be extended until October 14 — just two weeks before the UK is set to leave the European Union.

"Such an event would curtail attempts to block a no-deal Brexit within the UK parliament," Tan added.

Anti-Brexit MPs said Johnson's move amounted to a coup and a declaration of war.

The extension "certainly caught markets off-guard and came at a time when the pound had been recouping some of its [previous Brexit-fuelled] losses", noted Craig Erlam, senior market analyst at Oanda. 

"The FTSE, as ever, is the unintended beneficiary of the plunge in the currency, given that the vast majority of its earnings are generated outside of the UK."

By contrast, eurozone stock markets were down heavily owing to a stronger euro, and uncertainty over China-US trade talks that weighed also on Asian equities.

A poll showed German consumer sentiment is stabilising after three months of decline and despite fears of a looming recession in Europe's biggest economy.

Pollsters GfK said their forward-looking consumer barometer stood at 9.7 points, unchanged from August when it had fallen to its April 2017 level.

In commodities trading, oil prices extended Tuesday's surge that came in response to figures showing US stockpiles dived more than 11 million barrels last week, lifting hopes for demand and offsetting worries about the impact of the trade war.

Also providing support was Iranian President Hassan Rouhani's call for the United States to lift all sanctions against before he would meet Trump, after the US leader had said he would be open to talks.

Iran’s foreign minister has said the chances of a face-to-face were "unimaginable", meaning there was little chance of a thawing of tensions that would see the return of Iranian oil onto markets.

BRUSSELS — The European Commission said on Wednesday it had begun a preliminary investigation into Google's job search tool on competition grounds, having identified a conflict of interest.

"With respect to Google Jobs, our preliminary investigation is ongoing," a Commission spokesperson said, adding: "We cannot comment on or predict its timing or outcome.”

On Tuesday, Competition Commissioner Margrethe Vestager said the issue needed addressing on competition grounds.

"There's an obvious conflict of interest here, an obvious temptation to adjust the way the platform works, to favour their own services ahead of others," Vestager said in Berlin.

"For instance, many platform businesses act as both player and referee — they run a platform, and also compete with other companies that rely on that platform.”

"That's what Google did, when it used the power of its search engine to favour its own comparison shopping service. By doing that, it harmed competition and consumers — which is why we fined the company nearly two-and-a-half-billion euros, for breaking the competition rules.

"And we're looking right now at whether the same thing may have happened with other parts of Google's business — like the job search business known as Google for Jobs."

The Commission has the power to open a formal procedure if it finds sufficient evidence against Google, which could see the digital giant fined for a fourth time for what Brussels finds to be an excessively dominant market position.

The Californian behemoth's "Google Shopping" service was fined 2.42 billion euros ($2.7 billion) in July 2017, then 4.34 billion euros in July last year for antitrust violations with its Android operating system for smartphones. Last March it was fined 1.49 billion euros over search advert restrictions for third-party websites on its AdSense advertising service.

"What the Commission has found is that those different specialised services have some things in common — but they also have important differences," the Commission spokesperson said on Wednesday.

"We need to look individually at each of those services," the spokesperson added, referring to a 2017 Commission decision to investigate search services.

WASHINGTON — A US trade group representing major technology firms on Tuesday denounced an agreement on France's digital tax announced by Presidents Donald Trump and Emmanuel Macron that leaves the levy in place until a new international taxation plan takes effect.

The Computer & Communications Industry Association (CCIA) reacted a day after Trump and Macron agreed on a plan that would see France scrap its digital tax once a new international levy being discussed is in place.

"France's unilateral digital tax action aimed at leading American companies is unjustified, and if tolerated, will encourage other countries to follow their example," said Ed Black, the president of CIAA, which counts Google, Amazon and Facebook among the companies it represents.

"We should not support a compromise that would green-light discriminatory taxes against US tech companies for some vague promise of possible partial reimbursement years later."

France's levy of 3 per cent of revenues of big tech firms which take in at least 750 million euros ($830 million) annually has been criticised in Washington for departing from precedent on taxing revenue instead of profits and for targeting a narrow group of companies.

The French parliament passed the tax in July amid frustration at the slow pace of negotiations on a new global accord that would allocate more tax revenues of large international tech firms outside their home countries.

Under the agreement struck at the G-7 meeting of world leaders in Biarritz, French tax authorities will reimburse companies if they paid more than they would have under the yet-to-be-decided international formula, French Economy Minister Bruno Le Maire said.

The agreement appeared to head off a threat by Trump to retaliate with tariffs on French wine, although the US president offered no specifics on his commitment.

Before the agreement, US lawmakers and industry leaders had called for an investigation and potential retaliation for the French tax which affects some 30 companies, mostly from Silicon Valley.

"It is hard to imagine that the US would take no action against France's digital tax targeting US companies," CCIA's Black said.

"It is unclear how US companies would benefit from permitting France to flout its trade obligations."

Joe Kennedy, of the Information Technology & Innovation Foundation, a think tank often aligned with the industry, also said the US should reject the deal.

"If the United States gives France a pass now, then it will be open season for other foreign governments to go after major American employers and impose similar taxes," he said.

Google had no comment on Monday's announcement but pointed to previous statements supporting a new global tax treaty while warning of "dangerous repercussions" from the French tax.

BIARRITZ, France — There were signs of a thaw in trade-war tensions between China and the US on Monday as President Donald Trump said delegations would “very shortly” resume talks and Beijing’s top negotiator called for “calm”.

The two sides have been embroiled in a bruising year-long dispute that has seen tariffs slapped on billions of dollars worth of goods in two-way trade, with the row escalating over the weekend.

But just three days after the announcement of further mutual tariff hikes, Trump told reporters at the G-7 summit in France’s Biarritz that there had been two “very, very good” phone calls from “high-level” Chinese officials.

“China called last night... said let’s get back to the table. So we’ll be getting back to the table,” he said on Monday, adding that “they want to make a deal”.

He later said talks with China were “more meaningful than at any time” because the United States was doing well while China was “losing millions of jobs”.

Trump’s comments followed moves by China’s most powerful trade negotiator, Vice Premier Liu He, to take the edge off the soaring tensions.

“We are willing to solve the problem through consultation and cooperation with a calm attitude,” said Liu, according to a report by Chinese news outlet Caixin.

“We firmly oppose the escalation of the trade war,” he said, speaking at the opening ceremony of the 2019 Smart China Expo in the south-western city of Chongqing.

Trump later said “calm” was “very good word to use. It’s not a word I use often”.

The US president also insisted the calls were at “the highest levels”.

“The vice premier is low level? I don’t think so,” he said, seemingly referring to Liu.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin travelled to Shanghai in July for a round of trade talks, where discussions were described as “constructive” but ended with no announcements.

Monday’s detente came after Trump increased tariffs on more than half-a-trillion dollars worth of imports in a new round of punitive measures that are roiling global markets.

The US announcement on Friday followed an earlier surprise notification from Beijing that it would introduce fresh tariffs on US goods worth $75 billion.

Some of these measures are due to take effect on September 1, with the rest to follow over the coming months.

BIARRITZ, France — US President Donald Trump and Japan's Prime Minister Shinzo Abe on Sunday announced a deal in principle on a major bilateral trade deal.

"It's a very big transaction," Trump said after talks with Abe on the sidelines of the G-7 summit in the French resort town of Biarritz.

"Billions and billions of dollars," he said.

"It involves agriculture, it involves e-commerce. It involves many things. We've agreed in principle."

Abe confirmed the two nations had "successfully reached consensus" after "intense" negotiations.

Both leaders said they hoped for a formal signing during the UN General Assembly in New York next month.

However, Abe cautioned: "We still have some remaining work that has to be done... mainly finalising the wording."

US Trade Representative Robert Lighthizer said the agreement will especially benefit US farmers — a politically important group for Trump in his uphill push for reelection in 2020. 

Asked whether US tariffs already imposed on Japanese cars would be scrapped as a result of the deal, Lighthizer said some tariffs would be removed "but not those".

Trump also said the tariffs were "staying the same" but would not go up.

Bilateral alternative to TPP 

Trump and Abe enjoy close ties but the US president has frequently claimed that Tokyo has an unfair advantage in bilateral trade.

Negotiators have agreed Japan will place tariffs on US agricultural products up to levels that apply to members of the Trans-Pacific Partnership (TPP) pact, Japan's public broadcaster NHK and major Japanese dailies reported.

Both sides agreed Japan will cut tariffs on US beef and pork to TPP levels, but will not set new quotas for butter and skimmed milk, NHK said, citing unnamed sources.

Japan has repeatedly said the extent of the opening up of its agricultural market would be within the concession it had made to members of the TPP pact.

After an abrupt US withdrawal from the TPP, 11 countries circling the Pacific last year signed a slimmed-down version of the trade deal, and the pact has been championed as an antidote to growing US protectionism under Trump.

The US president has since sparked fears of a trade war by levying steep tariffs and denouncing unfair trading practices.

The United States will eliminate levies on a wide range of Japanese industrial products, but its tariffs on Japanese automobiles will be left for further negotiations as Trump sees the US trade deficit with Japan as a problem, NHK said.

SHANGHAI — The US retail giant Costco is diving into the thorny area of food retail in China with its first store opening this week, but analysts warn it faces a tough ride as it looks to succeed where a series of international retailers have failed.

The move also comes at a challenging time with Beijing and Washington engaged in a tense trade war that has seen them swap punitive tariffs on hundreds of billions of dollars of two-way trade.

China has proved a brutal battleground for overseas food retailers in recent years, with many failing to understand consumer habits and tastes as well as local competitors building a stronger presence.

In June, French supermarket giant Carrefour agreed to sell 80 per cent of its China business to domestic giant Suning after repeated losses.

German wholesaler Metro is in the process of selling its operations to a local bidder and British grocery giant Tesco pulled out of the Chinese market in 2014.

"The Chinese market is very complicated and requires retailers to innovate and localise," said Jason Yu, general manager of Kantar Worldpanel China.

But Costco thinks it can avoid the malaise that has plagued others with its "no-frills approach" and bulk-buy strategy.

The retailer will throw open its doors on Tuesday, five years after making its first online foray into China through Alibaba's cross-border e-commerce platform Tmall Global.

Richard Zhang, Costco's senior vice president for Asia, told AFP they had a "conservative" goal to sign up at least 100,000 new members for the new store, which is in a suburban district of Shanghai with a 2 million-strong population.

Zhang said they had taken time to make sure that consumers in China knew their brand and the market was mature enough.

Local competition 

Costco will be targeting China's affluent growing middle class, who know the brand from international travels.

However, analysts warned that local competitors are stealing ground with popular homegrown retailers such as Alibaba's bricks-and-mortar Hema stores integrating online and offline shopping.

"Local retailers are reaching out to customers via all distribution channels while foreign retailers are not so flexible to adapt to new situations," said Yu. 

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Chih-yuan Wang, retail research director at Mintel China Reports, warned that many foreign retailers adapted too slowly and "still didn't catch up with China's rapid ecommerce craze where customers go shopping on mobile phones".

"The cost of [later] building a home delivery service is very high and may affect Costco's basic strategy to provide the lowest available prices," he said.

Costco's big rival, membership-based warehouse Sam's Club from Walmart, has over two decades of history in China and is still on the expansion trail with plans to reach 40 stores by the end of next year.

But Zhang said the fact that Chinese consumers are already familiar with a membership supermarket model could work to Costco's advantage.

"Chinese consumers are ready to pay for a membership card that grants them an exclusive privilege to buy at a warehouse store, it's not a new concept in the country," said Zhang. 

"A mature market saves us efforts in educating customers."

While he is upbeat, Zhang says he has concerns over the impact of a bruising US-China trade war and tariffs, with about 50 per cent of their products from overseas.

"In order to keep our prices low, we've replaced some US importers of fresh produce with Australian importers," Zhang said.

The trade feud has escalated with Donald Trump on Friday increasing existing and planned tariffs on a total of $550 billion in Chinese goods, in response to new tit-for-tat levy hikes announced earlier that day by Beijing on $75 billion of US imports.

By the end of the year the feud will affect nearly all imports and exports between the two countries.

But ahead of Costco's official opening local residents were forming long queues to sign up for membership cards.

"I will definitely become among the first batch of Costco members," said civil servant Julia Zhu, who says she used to ship in Costco goods from overseas markets.

BIARRITZ, France — US President Donald Trump and EU leaders exchanged trade war threats on Saturday as they arrived in France for a G-7 summit of wealthy democracies overshadowed by trans-Atlantic tensions before it had even begun.

"Trade wars will lead to recession, while trade deals will boost the economy," EU Council President Donald Tusk said in Biarritz, the chic Atlantic resort chosen by French host President Emmanuel Macron to stage the annual meeting.

Trump flew into Biarritz on Air Force One hours after promising to impose punishing tariffs on French wine imports if Macron doesn't withdraw a tax on US tech giants.

Tusk vowed that the EU "will respond in kind".

"The last thing we need is a confrontation with our best ally, the United States," he said. "This is not our initiative, this trade and tariff struggle, but we have to be ready and we are ready."

It was a combative opening to the G-7 summit, traditionally a forum for frank yet cordial discussions among leaders from the world's leading economies — but much less so since Trump's election.

European leaders are also using the summit to mount a tough push for action against fires in the Amazon rainforest, despite Brazilian right wing President Jair Bolsonaro's angry response to what he sees as outside interference.

Echoing a warning from France, Tusk said Bolsonaro's response to the fires and his downplaying of climate change threw into question a major EU-South America trade deal.

"We of course stand by the EU-Mercosur agreement, which is also about protecting the climate and the environment," he said.

"But it is hard to imagine a harmonious process of ratification by the European countries as long as the Brazilian government allows for the destruction of the green lungs of planet Earth."

'People are mobilised' 

G-7 leaders were greeted by a mass protest outside Biarritz, though 13,000 police have been deployed to keep them far from view.

Organisers said 15,000 people rallied around 30 kilometres south of the G-7 gathering at the border town of Hendaye for a march over the Bidassoa River toward the Spanish town of Irun.

Red, white and green Basque flags waved above a crowd that included anti-capitalists, environmental activists as well as a few dozen of France's "yellow vest" anti-government protesters, according to AFP journalists at the scene.

"It's important to show that people are mobilised and do not accept the world they're offering us," said Elise Dilet, 47, of the Basque anti-globalisation group, Bizi.

The rally was peaceful so far, after police said 17 people had been arrested as of Friday night amid clashes with protesters camped out near Hendaye.

Escalating threats 

Talks in the beach resort, known for fierce rainstorms that blow in from the Atlantic, will also be dominated by the darkening clouds over the world economy.

Wall Street stocks slumped on Friday after Trump escalated his trade war with China that is seen as responsible for a global slowdown.

"We don't need China and, frankly, would be far... better off without them," Trump tweeted on Friday, saying US companies were "hereby ordered to immediately start looking for an alternative to China".

His outburst came after China imposed tariffs on US imports worth $75 billion in response to an earlier round of American measures.

Trump hit back immediately, raising tariffs still further.

As he left for Biarritz, Trump also fired a salvo at France, threatening to slap heavy tariffs on its wine in response to its move to impose a sales tax on tech giants like Facebook, Apple and Google.

"Those are great American companies, and frankly, I don't want France going out and taxing our companies. Very unfair," he told reporters at the White House.

"And if they do that, we'll be taxing their wine... like they've never seen before."

In a televised address ahead of the summit, Macron said his goal was "to convince all our partners that trade tensions are bad for everyone".

Johnson debut 

The G-7 meeting will also be the full international debut of British Prime Minister Boris Johnson, who will meet Trump for the first time as leader.

They are expected to discuss the UK's impending exit from the European Union, which the US president has enthusiastically backed.

But though Johnson needs Trump's support for a free-trade deal, he is at odds with him on a range of issues including the Iran nuclear crisis, climate change and global trade.

Trump is likely to find himself under pressure from the Europeans, particularly Macron, to ease off on his policy of "maximum pressure" on Iran over its nuclear programme.

Since pulling out of the landmark 2015 nuclear agreement limiting Tehran's nuclear programme, Trump has slapped crippling sanctions on the Iranian economy.

Macron wants him to put a "pause" on the policy, an aide said recently, which would enable talks to find a new diplomatic solution to the crisis.

Iranian Foreign Minister Mohammad Javad Zarif told AFP on Friday that Macron's "suggestions" to find a way out of the current impasse were "moving in the right direction".

BEIJING — China on Saturday angrily hit out at the latest US tariff hikes on its goods, saying a "bullying" Washington would eventually "eat its own bitter fruit".

European leaders have also warned US President Donald Trump of the dangers of trade skirmishes with China and Europe, which look set to dominate the G-7 summit held in France.

Trump on Friday increased existing and planned tariffs on a total of $550 billion in Chinese goods, in response to new tit-for-tat levy hikes announced earlier that day by Beijing on $75 billion of US imports.

A Chinese commerce ministry spokesman on Saturday denounced Washington's "unilateral and bullying trade protectionism".

The tariff increase "seriously undermines the multilateral trading system and the normal international trade order, and the US will surely eat its own bitter fruit.

"The Chinese side strongly urges the US side not to misjudge the situation, not to underestimate the determination of the Chinese people, and immediately stop its mistaken actions, otherwise all consequences will be borne by the US," the spokesman said.

By the end of the year, the feud will affect nearly all imports and exports between the two countries, with US companies — many of whom rely on China for inputs — particularly worried by the rapidly changing conflict.

EU Council President Donald Tusk on Saturday warned that Trump's escalating trade tensions with China and Europe could force economies around the world into recession.

Meanwhile, French President Emmanuel Macron, host of the G-7 summit in the French city of Biarritz, also warned of the widespread fallout from the trade disputes.

BRUSSELS — Eurozone business growth rose slightly in August but manufacturing output was down for the seventh month running and job creation remained weak, a closely watched survey said on Thursday. 

The service sector continued its solid growth across the single currency area, but manufacturing output was down everywhere except France, according to data from IHS Markit.

IHS Markit’s composite eurozone PMI, seen as a key indicator of business confidence, rose to 51.8 in August from July’s three-month low of 51.5, but still bumping along at one of the weakest levels in six years.

A reading above 50 points indicates an expansion, and the long-term trend appears to be heading towards stagnation.

Andrew Harker of IHS Markit said there was no change to the recent trend of the eurozone’s service sector propping up the wider economy despite a decline in manufacturing.

“The lack of a quick rebound from the recent economic slowdown has impacted firms’ confidence, with sentiment the lowest in over six years. It appears that companies are braced for a sustained period of weakness,” he said.

The rate of job creation in August was down from a month earlier, reaching its weakest level in more than three years.

Europe’s economic powerhouse Germany saw its biggest fall in new manufacturing orders in six years and firms were pessimistic about future activity for the first time in five years, the IHS survey found.

“The risk remains, therefore, that the euro area’s largest economy will have fallen into technical recession in the third quarter,” Harker said.

The glum data come two days before the G-7 summit, where French President Emmanuel Macron says leaders — including Germany’s Angela Merkel — should discuss ways to stimulate their economies amid fears of a global slowdown.