The Trade War Between US and Europe

It is predicted that a trade war between the US and Europe will increase soon. This is seen as the US has been stating the likelihood of introducing import taxes on over $8 billion worth of products to Europe. However, it is also predicted that Europe are very likely to react.

For example, Airbus (a French aircraft manufacturer) has been (and still does) receive subsidies from Europe. However, some US federal politicians have deemed this illegal with a vision of costs at $11 billion per year. Additionally Boeing, the American aircraft rival which had to cease a large amount of trade due to its controversies surrounding faulty plane manufacture, has lost out on a huge amount of deals to Airbus which only heightens the issue against the European aircraft giant.

The US wishes to further such taxes as retaliation,with a focus on luxury goods and alcoholic beverages. Adding to Europe’s issue is that the World Trade Organization will give the US the permission to carry out their tariff hikes. Europe has vowed to strike back, catalysing the makings of an all out US-European trade war and a risk of ‘importing inflation’ which may encourage investors to abandon risky stocks for the safety of bonds, as advised by Barclays due to an already weak Eurozone.