Press comment: Breakthrough in trade war

Commenting on the meeting between President Donald Trump and European Commission President Jean-Claude Juncker Quilter Investors portfolio manager, Sacha Chorley says:

“The Trump – Juncker meeting was a potential tipping point that could have prompted the fledgling trade war to spiral into something more damaging. Thankfully, we seem to have been rescued from the brink and there will now be plenty of optimism that the US-EU confrontation will cool off.

“President Trump seems to have developed a negotiating pattern in which he aims to draw maximum publicity to a particular issue in order to force the matter onto the agenda before eventually reaching a compromise. We have seen that pattern already in foreign relations under his Presidency, and these negotiations seem to be following the same script. After months of chest beating over international trade, markets will be relieved to hear some positive noises from political leaders and will now look for hard details on how the new trade relationship will work.

“One of the main things to look out for is the issue of vehicle tariffs, which is the keystone to the whole negotiation. They have already proposed working toward zero tariffs on other industrial goods, so the key is whether they will bring down tax on American motors shipped into Europe too. A refusal to bend on tariffs on imported vehicles could lead to another stalemate.”


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