Europe was not directly focused on the wave of American rates that came into effect on Tuesday, but the effects are felt here.
Keyu Jin, a professor at the London School of Economics, said that Tit-for-Tat rates would not necessarily lead to less global trade, but a “fragmentation and regionalism” that forge new blocks that are aimed at “non-relieved” in the intensifying trade war between the United States, the neighbors and China.
She spoke on Tuesday on a panel in Barcelona on one of the world's largest technical fairs, which is running this week. The annual event, known as Mobile World Congress, attracts more than 100,000 people for product pitches, fundraising calls and debates about the future of technology.
The new American rates in Canada, China and Mexico – the three largest American trading partners and crucial raders in many supply chains – were a common subject of conversation around the vast expocent tenter. European companies are heavily represented during the event, and some managers tried to frame rising trade tensions as an opportunity for Europe, whose considerable population and economy are often stopped by a slow growth and a lack of competitiveness.
The recent mobilization of European leaders to increase Ukraine's military support was cited as an example of deeper European integration that tend to work out in the past. But the suspension of American aid and the urgency of the plight situation of Ukraine – Prime Minister Keir Starmer of Great -Britain described it recently as “an intersection in history” – could stimulate greater continental cooperation, managers said.
Investors have piled up in shares of European defense companies that benefit from a fitted military editions. And the European markets have generally performed better in recent weeks than the US shares, even after slipping on Tuesday after the American rates have come into force and some targeted countries have taken revenge.
Some of the technical execs in Barcelona say that this is no coincidence: companies with Europe-oriented activities and supply chains can be seen by global investors as a kind of geopolitical hedge against the rates and trade stresses arising from the United States. Take the stock market index that European Telecom follows, for a long time seen as a somewhat sleepy inner water, which has risen by around 12 percent this year alone.
But this dissertation will soon be tested when President Trump is planning to broaden the scope of the rates to cover all American imports of steel, aluminum, copper and cars, as well as 'mutual' rates against countries to tackle what he calls 'unfair' relationships to set the production to the United States.
