Trade wars & European Investors: We're next!

[ThunderBlade + 231]

While global markets would hail a U.S.-China trade deal, fears are growing that the European Union could be the fall guy in any breakthrough, which would allow Donald Trump to turn his attention to German cars or French luxury wines. Investors thinking of chasing a rally on a trade accord through European trade proxies, such as Germany’s export-heavy DAX index or the continent’s luxury names, should probably think twice, analysts believe. For trouble could come in a lot of different forms. Alicia García-Herrero, Chief Economist at Natixis for Asia Pacific, and a researcher at the Bruegel think-tank, is among those who have warned that a deal “could cost Europe dearly” if China substitutes a large part of its European imports for U.S. goods in a bid to appease the Trump administration. There is a lot at stake. European-listed firms expect 456 billion euros (£398 billion) in total revenue from China in 2019, with luxury brands and automakers the most exposed sectors, a Refinitiv analysis of company data shows. Vincent Deluard, global macro strategist at INTL FCStone, said that in the case China and the United States fail to clinch a deal, Europe could be flooded with cheap Chinese goods. “Europe stands to lose the most when the truce expires on March 1st as China would surely dump billions of discounted goods on the old continent,” Deluard wrote. In 2017, China exported goods worth 374 billion euros to the EU and 505 billion dollars to the United States.

[Pavel + 384]

One of the victims of the American-Chinese trade war!?

[pinto + 293]

Trade war are going on and 2019 will be one of the biggest challenges for the World

[damirUSBiH + 327]

Trade has been disrupted irrespective that it's multilateral or bilateral. This is war that will disrupt the global economy for some time.... 

[50 shades of black + 254]

China first, EU next? Hmmm, I'm afraid it's too much of a bite...

[rainman + 263]

Everyone can be negatively affected by a trade war.  By economic unsurety. 

[John Houbion + 31]

Let the Germens deal with the Chinks' tariffs ... 

not our problem Mr. Kudlow!

 

Here were the top 20 most exported models from U.S. plants to China in 2017:

• BMW X5: 52,407.
• Mercedes-Benz GLE: 40,304.
• BMW X3: 34,609.
• Lincoln MKC: 17,753.
• Mercedes-Benz GLS: 17,420.
• Mercedes-Benz R-Class: 13,402.
• Ford Explorer: 12,906.
• BMW X4: 10,928.

[John Houbion + 31]

A total ban on German automobiles is long overdue.

 

The EU had it easy with Obama ... Trump understood it a long time ago.

 

Any fifth grader can understand it also:

 

A vehicle at a German dealer with a MSRP of $100,000 will sell at a SC dealer for $83,325.00

($100K - 19 % VAT abatement + 2.5 % import duty + $300 SC sales tax).

 

An identical vehicle (quality, &c.) selling at a SC dealership with a $100,000 MSRP will sell at the German dealership  for $131,495.00 when exported:

($100K + 10.5 % import duty + 19 % VAT).

 

Ergo, the US consumer will save $16,675.00 and the German consumer $31,495.00 by buying a car made in Germany, ceteris paribus!

 

Trump's total ban on German imports is long overdue indeed, right!