Trade War 2.0
A second trade war is upon investors. The European Union is guilty as charged for unfairly helping Airbus gain an edge on its rival, Boeing. Now, Trump is delivering on his promise of revenge with 10% and 25% duties on agricultural products, and of course, European aircraft.
It all started with a commercial aerospace duopoly over the Atlantic. The European Union (EU) has always rooted for French plane maker Airbus, and the US for Boeing. Not long ago, a lawsuit was levied against the EU for unfairly helping Airbus. The guilty verdict is in, and now the EU is being levied with something much nastier. The White House has released a list of goods subject to new tariffs. Brussels says it’s up for the fight. Markets? Not so much.
For the United States, it would be two against one. President Trump still has China fighting him on trade, which is the second-largest economy in the world. The European Union can barely keep itself in one piece. It surely can’t blink in the Brexit negotiations, and as it happens, Britain has been caught by Trump’s wrath with 25% duties on everything from cheese to frozen meat. If the EU retaliates and makes things worse, Britain will want out even sooner. The next twenty-four hours will be big, and all because the World Trade Organisation (WTO) did its job and investigated Airbus!
It doesn’t get much bigger than the World Trade Organisation (WTO). As countries go hammer and tongs for a competitive edge on each other, the WTO tries to referee. It writes the small-print for international trade, sets the rules, and tells nations to cooperate rather than rip each other off, all for the good of the global economy. As you can imagine, it’s had plenty to say about President Trump’s liberal use of tariffs this year. How ironic then, that it could now be to blame for a World War 3 fought on trade, prime time for a stock market bargain if you know where to look!
