Self-Driving Revolution Stalls Out
That’s right folks, the EU’s day of reckoning may be here as they find themselves in the USA’s tariff cross-hairs to the tune of $11bn. Here we go again!
The US is considering slapping the EU with tariffs in response to recent subsidies shown to have adverse effects on the US while benefitting EU aircraft manufacturer, Airbus. The damage supposedly accumulates to a whopping $11.2bn total, which the US has threatened to offset by placing duties on large aircraft, cheese and wine products coming into the US.
Tensions have been simmering between the US (Boeing) and EU (Airbus) for almost a decade in the aircraft industry with both sides having been caught paying billions of dollars in underhanded subsidies to take the lead in the global airliner business. Now things are really heating up.
In its current vulnerable state, the EU can hardly afford to wage economic war with the US when growth and stability are under such immense pressure. With German bond yields continually flirting with negative territory and industrial activity teetering on the brink of recessionary levels, the effects of a prolonged trade spat could be devastating.
How the EU reacts to this escalation is important, and if inflammatory, could spark a new phase of volatility for European and global equities. Airbus is already down 1.68% at the European open and may be poised for more downside so long as the tensions persist. So buckle up, this could get bumpy!