As a trade war between America and the European Union, and America and China, Europe is looking to deepen its economic ties to China. Preparations are under way to provide a multilateral investment agreement between the EU and China which would help offset the economic losses incurred by Trump’s trade war as well as help to preserve the multilateral economic order.
Friday, the world witnessed US President Donald Trump threaten Europe with a 20% tariff on auto imported to the US from the European Union.
The European Union is threatening to counteract any new tariffs coming out of Washington against autos produced in the EU. Meanwhile, the very automakers to incur these tariffs are often ones with considerable investments within the United States, employing thousands of American labourers.
In a further sign the US is losing the dominance of the world’s economic system which it has enjoyed since the end of World War 2, Russia is massively divesting from US securities.
In April, Russia dumped $47 billion in US bonds – roughly half of the US debt it holds.
US President Trump’s escalating tariff war, plus ever-expanding US sanctions on Russia, could also be contributing factors to Moscow’s decision to increasingly ditch dollars.
In exchange, Russia is turning to an ancient and time-tested store of value: gold.
Volvo Cars has just opened a brand new plant in Berkeley, South Carolina, that was expected to employ up to about 4,000 people. But with Trump’s tariffs war with China and the EU, those plans could be nipped in the bud. Volvo Cars is a Chinese owned auto company and views Europe as a major component of its operations and market.
Lots of production and jobs are on the line as the effects of Trump’s metals tariffs work their way down the food chain. Several companies that utilize steel as a primary material for the products they produce are concerned about how these tariffs will impact their competitiveness, their workforce, and their bottom lines.
ABC News reports:
US President Donald Trump campaigned on the idea of repatriating American manufacturing in order to create more jobs that pay livable wages, like in the good ol’ days when America was ‘great’ and prosperity was experienced by the bulk of the population.
So Trump has embarked on a trade war with America’s trading partners to convince the manufacturers to bring production back home and America’s trade allies to provide more equitable trade terms to America.
Economists and investors alike are really hoping that Trump’s threats to hike the tariffs even further turn out to be a bunch of hot air, aimed at scoring a few policy points, as their manifestation as a reality would spell some bad news not just for the American economy, but for that the whole world. It’s for this reason that they’re describing Trump’s trade war as a ‘tipping point for the global economy’. That has a lot of implications.
When Trump ran on creating more good paying American jobs and on creating a more business friendly environment, many took him seriously and backed him at the polls. Among that number are those manufacturers that happen to still be producing in America, for whatever reason.
UN ambassador to the UN, Nikki Haley, withdrew the US from the UN Human Rights Council just days before a report was to be presented detailing the threat which poverty poses to human rights in America, and the threat which it poses to America’s democracy. Haley’s withdrawal took place on Tuesday, and UN Special Rapporteur Philip Alston’s report came out on Friday.
Trump thinks that the rest of the world is being unfair in its trade with America, and that’s why he’s withdrawing from crucial international trade agreements and threatening others, namely the North America Free Trade Agreement (NAFTA), and imposing tariffs on America’s trade partners the world over.
