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US, China trade tariff blows; Musk admits to Tesla's Norway struggles

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US, China trade tariff blows; Musk admits to Tesla's Norway struggles

TOP NEWS

* China levied tit-for-tat tariffs on $34 billion worth of U.S. goods, including vehicles, agricultural products and aquatic products, igniting fears of a full-blown trade war after previously announced U.S. tariffs on $34 billion of Chinese goods came into effect July 6. China's Ministry of Commerce said the U.S. move has sparked the "largest trade war in economic history," which will hurt global growth. President Donald Trump said July 5 that the U.S. may eventually impose tariffs on more than $500 billion worth of Chinese goods.

* Tesla Inc. CEO Elon Musk tweeted that customers in Norway are "right to be upset with" the U.S. electric-car maker's service after Norway's consumer council placed Tesla fourth in the order of companies that consumers complained about the most in the first half of 2018. Musk added that the company is facing trouble expanding its service facilities, especially in Oslo, and is awaiting government approval to resolve them through Tesla mobile service vans.

CARMAKERS

* Ford Motor Co. said it will not hike prices of its imported Ford and higher-margin luxury Lincoln models in China despite additional Chinese tariffs on U.S vehicles from July 6, Reuters reported. The Detroit carmaker's sales in the country dipped 38% year over year to 62,057 vehicles in June, while total sales for the first half of 2018 fell 25% year over year to 400,443 units, Reuters reported.

* Tata Motors Ltd. CFO PB Balaji said the Indian automaker and its unit Jaguar Land Rover Ltd. have "always maintained" that Brexit uncertainties are "avoidable," adding that a worst-case Brexit scenario was not factored into its plans as it is only one of several possibilities. Seeking more clarity on Brexit, Balaji also said the British luxury carmaker "needs free and full access to the single market beyond transition to remain competitive."

ELECTRIC AND AUTONOMOUS VEHICLES

* Daimler AG secured clearance for highly autonomous level 4 driving tests for its Mercedes-Benz vehicles on the roads of Beijing, becoming the first international carmaker to do so in China, the company said. The clearance in China marks the Mercedes-Benz parent's third market for autonomous vehicle testing after Germany and the U.S.

* Peugeot SA entered into a four-year partnership with a French computer science institute to set up an artificial intelligence research center focused on making AI-related automotive tests more efficient and reliable. The carmaker and France's Institut national de recherche en informatique et en automatique, or Inria, will research areas such as autonomous and intelligent vehicles, mobility services, manufacturing and design development tools.

* China's Xiamen King Long Motor Group Co. Ltd. inked a memorandum of understanding with SoftBank Group Corp.-owned SB Drive and Baidu Inc.'s Japan unit to launch a self-driving electric vehicle Apolong in Japan, news portal Xinhua Silk Road reported. The cars reportedly are expected to be available in the country around 2018-end or at the beginning of 2019.

REGULATIONS AND SAFETY

* German Chancellor Angela Merkel said she would support reducing tariffs applied by the EU to cars imported from the U.S., which has offered to withdraw threats to slap additional duties on European vehicles if the bloc scraps duties on cars imported from the U.S., Reuters reported. Merkel said negotiations over EU tariffs such as those imposed on cars "need a common European position and we are still working on it."

* Scott Pruitt resigned as head of the U.S. Environmental Protection Agency, President Donald Trump tweeted July 5. The decision follows heavy scrutiny of Pruitt's spending and management practices at the EPA, including more than a dozen investigations into his conduct from the White House, Congress and government ethics officials.

* Germany's top court rejected Volkswagen AG's bid to block Munich prosecutors from using a report they seized from U.S. law firm Jones Day, which the carmaker hired to probe the roots of its diesel-emissions scandal, Bloomberg News reported. The Federal Constitutional Court rejected VW's argument that the use of the report by prosecutors violated attorney-client privilege and ruled that the seizure was legitimate under German law. VW reportedly said it "welcomes" clarity on the matter, even though "the court did not share Volkswagen AG's understanding of the law."

* China might further cut its electric-vehicle subsidies from 2019, with a proposal that could lower the average purchase incentive per EV by over a third from 2018 levels, Bloomberg News reported, citing people familiar with the plan. Another reported measure, which is also under discussion and subject to change, includes raising the maximum distance an EV can cover on a single charge to 200 kilometers from 150 kilometers. The country's automotive industry policymaker, the National Development and Reform Commission, did not immediately respond to Bloomberg's request for comment.

* Volkswagen AG's U.S. unit issued a recall of 821 of its Atlas and Tiguan vehicles, of 2018 make, due to a passenger front airbag issue, ConsumerAffairs reported. The recall reportedly starts Aug. 3.

AUTO PARTS AND EQUIPMENT

* German auto parts maker Hella GmbH & Co. KGaA said it agreed to sell its Danish wholesale unit FTZ Autodele & Verktoj A/S and its Polish counterpart Inter-Team sp. z o.o to Swedish automotive retailer Mekonomen AB for €395 million. Hella also will receive an amount equivalent to cash flows generated by the two businesses from Nov. 30, 2017, until the completion of the deal, which is subject to customary antitrust regulations.

AUTOMOTIVE RETAIL

* BCA Marketplace PLC said Apax Partners LLP will not make any further offer for the U.K.-based used vehicle retailer after the operator of the WeBuyAnyCar platform rejected two preliminary proposals from the private equity firm.

* German automotive parts maker ZF Friedrichshafen AG said it spun off its electronic payment service for electric vehicle charging, called Car eWallet, as a separate company to woo investors after the end of initial six-month collaboration with IBM and UBS. ZF will invest the seed capital into Car eWallet GmbH, which is expected to roll out its first pilot projects in the second half of 2018. The Car eWallet service also enables customers to pay for tolls, parking fees or car sharing services.

TRUCKS AND MOTORCYCLES

* Volkswagen Truck & Bus GmbH's Scania truck brand said it halted temporarily sales and deliveries of vehicles fitted with its V8 engines due to an ongoing strike at an engine component supplier. The company, which also faced disruptions previously in 2018 from the casted engine parts supplier, said Scania is unable to deliver over 2,000 trucks that come with the V8 engines. It is trying to offer alternative 13-liter engines or other remedies to its customers, Scania said.

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The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng increased 0.47% to 28,315.62, and the Nikkei 225 rose 1.12% to 21,788.14.

In Europe, around midday, the FTSE 100 was down 0.21% to 7,587.28, and the Euronext 100 was up 0.14% to 1,051.59.

On the macro front

The employment situation report, the international trade report, the EIA natural gas report, the Treasury STRIPS report and the Baker-Hughes Rig Count report are due out today.

The Daily Dose is updated as of 8 a.m. ET. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.