{"id":145453,"date":"2019-04-09T09:01:19","date_gmt":"2019-04-09T13:01:19","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=145453"},"modified":"2019-04-09T09:01:19","modified_gmt":"2019-04-09T13:01:19","slug":"european-equities-lower-on-new-trump-tariff-threat-to-eu","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/04\/european-equities-lower-on-new-trump-tariff-threat-to-eu\/","title":{"rendered":"European Equities Lower On New Trump Tariff Threat To EU"},"content":{"rendered":"
April 9, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

If there is one word that describes Donald Trump best (and no, it\u2019s not the one you\u2019re thinking of!) it has to be\u00a0\u201cunpredictable\u201d.<\/strong><\/p>\n

Throughout his campaign and his time as president, Trump has constantly surprised both politicians, pundits and markets alike. The latest headlines surrounding the 45th<\/sup>\u00a0President of the United States, prove that this is still the case.<\/p>\n

Trump\u2019s Focus Shifts<\/strong><\/h2>\n

In the wake of the year-long trade war between the US and China which rattled global markets last year and caused a\u00a0nosedive in global growth<\/a>, traders warmly\u00a0welcomed news of a truce<\/strong>\u00a0between the US and China. With\u00a0negotiations continuing<\/strong>\u00a0and\u00a0a deal looking likely<\/a>, price action in risk assets reflects the shared sense of relief among traders.<\/p>\n

However, traders were greeted\u00a0today\u00a0with\u00a0news\u00a0that\u00a0Trump is now threatening to apply further tariffs to EU goods<\/strong>. The Trump administration has identified a\u00a0list of roughly $11 billion<\/strong>\u00a0EU imports to the US which could come under tariff.<\/p>\n

The administration claims that this is a response to the harm being caused as a result of the EU\u2019s subsidies to Airbus SE, Boeing\u2019s main rival.<\/p>

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Wide Range of Goods Targeted<\/strong><\/h2>\n

The list, issued by the US Trade Representative\u2019s office covers a\u00a0wide range of goods<\/strong>\u00a0including jetliners, passenger helicopters, wine, cheese, ski-suits, and motorcycles.<\/p>\n

In a statement released yesterday evening, the USTR said that under\u00a0Section 301 of the Trade Act of 1974<\/strong>it will begin a process to \u201cidentify products of the EU to which additional duties may be applied until the EU removes those subsidies.\u201d It claims these have \u201crepeatedly\u201d caused \u201cadverse effects to the United States\u201d.<\/p>\n

WTO Rule Against Airbus<\/strong><\/h2>\n

News of the tariffs comes in the wake of the\u00a0World Trade Organisation ruling that Airbus<\/strong>\u00a0had received illegal funding for its A380 and AS50 models.<\/p>\n

This had negatively impacted Boeing\u2019s sales. The tariffs the Trump administration is threatening will reportedly only become active if the WTO approves the move this summer.<\/p>\n

US\/EU Tensions Growing<\/strong><\/h2>\n

The current levy being discussed is\u00a0minor compared to the current $360 billion<\/strong>\u00a0worth of Chinese goods under tariff. Plus, a similar amount of US goods are under Chinese tariff. That being said, this does mark a significant\u00a0escalation\u00a0<\/strong>in the standoff between the EU and the US.<\/p>\n

Timing wise, the move also coincides with the EU being in the final rounds of crucial negotiating the terms. These will determine the terms under which the European Commission will negotiate with Trump on industrial tariffs. And it\u2019s highly likely that this will complicate those talks.<\/p>\n

Commenting on the situation, Robert Lighthizer, the US Trade Representative said:<\/p>\n

\u201cOur ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft\u2026When the EU ends these harmful subsidies, the additional\u00a0US duties imposed in response can be lifted.<\/strong>\u201d<\/p><\/blockquote>\n

Boeing Statement<\/strong><\/h2>\n

In response to the news, Boeing issued a statement. The company claimed that it \u201csupports the US trade representative and his team in their ongoing efforts to level the playing field in the global aircraft marketplace.\u201d<\/p>\n

The market now waits to hear the outcome of the WTO\u2019s ruling this summer. This will determine whether Trump will press ahead with the tariffs.<\/p>\n

Technical Perspective<\/strong><\/h2>\n

\"GER30\"<\/a><\/p>\n

GER30 traded lower this morning following the news. Bigger picture price continues to grind higher within the bullish channel which has framed price action this year. For now, price is hemmed in along the underside of the resistance trend line. Any retest of broken prior highs at 11725.6 should find support, the channel bottom providing deeper support. 12117.3 is the next key overhead level, with longer-term bearish trend line resistance above that.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex If there is one word that describes Donald Trump best (and no, it\u2019s not the one you\u2019re thinking of!) it has to be\u00a0\u201cunpredictable\u201d. Throughout his campaign and his time as president, Trump has constantly surprised both politicians, pundits and markets alike. The latest headlines surrounding the 45th\u00a0President of the United States, prove that […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-145453","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/145453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=145453"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/145453\/revisions"}],"predecessor-version":[{"id":145459,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/145453\/revisions\/145459"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=145453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=145453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=145453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}