06-22-2018, 03:04 AM
Edwards says a trade war is primed to break out as a result — and could dwarf the escalating trade conflict with China. "The key is that the ECB has, with its divergent monetary policy, pushed down the euro and is indirectly responsible for greatly exacerbating current trade tensions," he wrote in a client note. "The ECB's QE might have papered over the cracks in the eurozone for now, but it has also raised the likelihood of a full blown US/EU trade war." So how might a US-EU trade war look? Edwards says the focus will be squarely on European automakers. As he points out, Trump has long expressed disdain toward the dominance of German brands in the luxury auto market. And today, the US charges just 2.5% on car imports, compared with 10% for the EU and 25% for China. Edwards says expect that to change as Trump looks to implement "considerably higher" tariffs.
US-China tensions distracting from far bigger trade war: Edwards - Business Insider