The EU signals it may be ready to compromise with US over tariff dispute
Cecilia Malmström has been outspoken on Trump’s tariff action against the EU, Canada and Mexico
Investors could breathe a small sigh of relief yesterday as stocks in the US and Europe saw a little more stability. The slight recovery in stock prices could have been related to the fact the US Ambassador to Germany met with major carmakers including BMW, Volkswagen and Daimler – whose executives allegedly said they favor scrapping car tariffs between the US and Germany as part of a broader deal on trade (according to a Wall Street Journal report).
Indeed, Daimler is already feeling the squeeze, as it warned of lower profits this year, saying proposed new import tariffs on cars exported from America to China would hurt sales of Mercedes-Benz sports utility vehicles.
The reports were vindicated today as the European Union signalled that it is ready to engage with the US to solve the trade-war row according to the EU Trade Commissioner Cecilia Malmström, who said that while the US tariffs were ‘illegal’ and in breach of WTO rules, she added: “We are always open to talk with the US. The whole EU is based on the idea that we talk.”
Could this openness from Europe be the beginning of a more fruitful relationship between the bloc and the Trump’s Republican cabinet? We can only hope so, given an improvement in relations and an end to trade tension could boost stock prices, but with Trump taking pot shots at German Chancellor Angela Merkel on Twitter all week, things are still tense between European governments and his own in Washington.
Indeed, the words from the Trade Commissioner came only one day after the EU’s trade representatives said the bloc would launch a raft of retaliatory tariffs against the US on Friday, which would mainly be targeted at products designed in red (Republican majority) states, in order to hit Trump’s base (most fervent supporters) directly.
However, given that these counter-measures would only amount to €2.8 billion’s worth of US goods, the material impact is likely to be limited, despite the headlines from major news outlets that warn of ‘severe consequences’. US Commerce Secretary Wilbur Ross, who is often touted as a key instigator of the trade tariffs, has dismissed the concerns about higher costs, arguing that the effects would be minimal.
Both Ross and Trump have long maintained that the US has already been in the midst of a trade war with both its allies and China for many years, given the great gutting of America’s middle class and its factory workers, who saw their jobs shipped overseas in huge numbers amid increasing globalisation in the last few decades. Not only this, but Chinese intellectual property theft has been a concern even with past administrations.
Some volatility has returned to markets this Thursday, as the FTSE 100, DAX, CAC40 and IBEX 35 indices in Europe dropped as the day continued, so investors entering the market or holding positions should be mindful that asset prices may fluctuate as the dispute continues, at least until a deal is struck between the EU and US on tariffs.
Related: Are trade war fears justified?
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Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services of US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth, LLC a registered broker-dealer and member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions.
DriveWealth provides no tax, legal, or investment advice of any kind, nor does DriveWealth give advice or offer opinions with respect to the nature, potential value, or suitability of any securities transaction or investment strategy. DriveWealth acts as the clearing firm for securities transactions entered on the Invstr mobile platform. DriveWealth is not affiliated with Invstr. Invstr does not participate in DriveWealth’s decision-making.
There is no minimum initial deposit required to open an investing account with DriveWealth. Expenses and Fees associated with the DriveWealth platform in conjunction with Beanstox includes either a monthly membership fee of $4.99 with a commission charge of $0.01 per share* or, in the event the membership fee is not paid, a commission charge of $0.0125 per share applies, subject to a minimum of $2.99 per transaction. There are no monthly minimum fees, or required ongoing minimum account balance. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost). View a full list of our fees at http://bit.ly/DWFees
The monthly subscription charge is four dollars and ninety-nine cents (US$4.99) per month plus one cent (US$0.01) per share traded (as examples, for a Transaction of 0.90 shares, the per share traded charge is one cent (US$0.01), and for a Transaction of 1.6 shares, the per share traded charge would be two cents ($0.02), and the quarterly subscription charge is fourteen dollars and ninety-nine cents (US$14.97) every 3 months plus one cent (US$0.01) per share traded. The monthly and quarterly subscription charges may be greater or less depending on additional services offered by a DriveWealth partners as part of the subscription model offering, or based on any subsidies provided by a DriveWealth partner as part of the subscription model offering. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost).View a full list of our fees at http://bit.ly/DWFees
This communication is not an offer or solicitation to purchase or sell securities. Investing in securities carries risk, including the loss of principal. Past performance is not indicative of future returns, which may vary. Online trading has inherent risk due to system response and access times that may be affected by various factors, including but not limited to market conditions and system performance. An investor should understand such facts before trading. The risks associated with investing in international securities, including US-listed ADRs and ETFs that contain non-US securities include, among others, country/political risk relating to the government in the home country; exchange rate risk if the country's currency is devalued; and inflationary/purchasing power risks if the currency of the home country becomes less valuable as the general level of prices for goods and services rises. Before investing in an ETF, an investor should consider the investment objectives, risks, charges, and expense of the investment company carefully. ETF prospectuses are accessible within the mobile application via a link under each company’s “Description.”
A fractional share is a share of equity ownership that is less than one full share. Fractional share investing has certain limitations and restrictions that investors should understand prior to purchasing fractional shares: ownership of less than one full share does not give the fractional share owner the right to vote on company matters; fractional shares are non-transferrable, meaning they cannot be transferred to another brokerage firm; and fractional share orders will be accepted as market orders only. For more information and details on fractional shares, and any associated limitations or restrictions please visit: https://drivewealth.com/fractional-shares-disclosure