No let-up likely in Trump trade war talk

Kuwait Times - - BUSINESS -

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.

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