No let-up likely in Trump trade war talk
LONDON: Talk of trade war looks here to stay for the time being, especially as data over the coming week seems more likely than not to aggravate US President Donald Trump’s gripes with China and Germany. While global trade has bubbled back into life after a lean few years, so too have fears of protectionism, leaving financial markets wary in an otherwise improving global economy.
German Foreign Minister Sigmar Gabriel said last month it was a cause of “great concern” that the United States could start a trade war with Europe, while tension between Washington and Beijing has escalated.
In the last week US senators from both sides of the house urged Trump to stand up to China as he prepares to launch an inquiry into its intellectual property and trade practices in coming days. At the moment, the working assumption for most investors is that international cooperation will win the day - as the International Monetary Fund pushed for earlier this year - before a full-blown trade war starts. “Do I think that the US will be dumb enough to go ahead and put in place a series of measures which will act as an obstacle to trade with these countries? I suspect not,” said Peter Dixon, global financial economist at Commerzbank in London.
The United States posted a much smaller goods trade deficit than expected for June, helped by an improvement in exports.
But this may be eclipsed by figures from China and Germany due in coming days.