News

Tariffs & Trade - the war of words

05/03/2018

There can only be one winner in the current war of words between President Trump of the USA, and the man who wishes to be President of Europe, Jean Claude Juncker, and it’s not going to be the Luxemburger. After Juncker reacted to Trumps application of tariffs on imports of foreign steel & aluminium by suggesting hitting back with tariffs on Harley Davidsons & Levi jeans, one is inclined to wonder if Junckers notorious thirst hadn’t got the better of him again. Whilst Levi Strauss jeans remain popular in the EU, it is hardly plagued with gangs of Harley Davidson riding biker groups.

The pugnacious President, (never one to bring anything less than half a dozen tanks to a gunfight), hit the EU right where it hurts the most – by threatening to tariff the German automobile industry. Mr Junckers telephone board must have lit up like a Christmas tree after that helpful intervention, surely a scenario we can all enjoy. However, this raises some interesting & uncomfortable questions for European Stock Markets. A trade war could be extremely disruptive to the lengthy bull run we have seen, and with the EU having to face both the reality of the departure of the of the UK cash cow with no deal in sight (or even in prospect), and now the Italians having the temerity to vote in favour of parties that have no love for the grand vision of the EU superstate, this could open a second front. The bad news for the German economy, reliant as it is on a Euro exchange rate that is unquestionably significantly lower than it would be if Germany was the only country to have adopted it, remains unsettling, and if anything, Germany Index (#Dax30) looks more vulnerable than some of its less vaunted neighbours.

Share this news

Related posts

Economic 2019-07-31_FOMC.png

Countdown to FOMC on 31st of July

31/07/2019

Market expects 0.25% rate cut on 31st of July 2019

Read more
Calendar Calendar.jpg (1)

The week ahead 15.07.2019

15/07/2019

Upcoming releases next week

Read more
Stock Market US stock-exchange.jpg

Stock market rally

10/07/2019

Stock market rally after Powell transcript

Read more
Forex News yen.jpg

Dollar Yen breaks lower

24/05/2019

Dollar Yen breaks lower

Read more