Trade war on the campaign trail

Europe is waging its most decisive battle at the polls to clarify its course from the 26 May elections and see which course its parliament is going to take: whether towards the conservative right, the European left, or a fragmentation that would further complicate the coexistence and future of the union. On the other side of the puddle, another war is being waged, no less decisive, which will have negative consequences on the world economy: the two global commercial giants have gone out into the arena of struggle.

The trade war between the world’s two largest economic powers has been an important risk factor for investors this year and has threatened the economic prospects of countries in the Asia Pacific region. It comes against a background of America’s rising concerns about China and China’s growing influence around the world.

The ambitious Chinese plan to extend its influence through the New Silk Road, its “Made in China” plan for 2025, and the fierce struggle between American companies led by the so-called GAFAM “Google, Amazon, Facebook, Apple, Microsoft” on the one hand, and, on the other hand, the two Asian giants: Huawei and Alibaba.

China and the US had struck an agreement on the issue of intellectual property, which included the issue of protecting and subsidizing its flagship Huawei brand to conquer 5G. However, China eventually backed out of this agreement and, after this, Trump threatened sanctions and rising tariffs. In return, China has doubled its tariffs on American products.

Meanwhile, Europe began negotiations for a limited trade agreement with the United States last month. A totally different agreement from the late TTIP, the Transatlantic Trade and Investment Treaty. This trade agreement will only affect industrial products: automobiles and steel, with the express exclusion of agricultural products, because of the sensitivity in Europe to everything related to agriculture.

Finally, while Trump is pursuing re-election, he will not hesitate to pull out his “America First” flag; Europe is placing its future on the geopolitical map from 26 May, with Brexit on the horizon. The coming days and months will not leave anyone indifferent and will bear consequences on both our pockets and on the world economy.

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