25.07.201813:46 Forex Analysis & Reviews: Trump Meeting EU's Jean-Claude Juncker: The main event of the environment

Long-term review

Trump Meeting EU's Jean-Claude Juncker: The main event of the environment

Today in the US, direct negotiations on duties and trade will take place Trump-Juncker (the head of the European Commission is an analogue of the EU Prime Minister). Theme of the meeting is reciprocal duties of the US and EU.

Recently, the US imposed duties on steel and aluminum on all countries, including the EU and Canada (and Japan and China). The EU has acted tough against such a measure, many times unsuccessfully tried to persuade Trump not to introduce new duties (this was done by both Merkel and Macron at personal meetings with Trump, to no avail). The EU responded with duties against goods from the United States.

In the "answer to the answer" Trump demanded to introduce duties on cars from the EU in the amount of 20-25%. Trump's argument, now the duties on car import in the EU are 10%, and in the USA 2.5%. At the same time, Trump ignores the high import duties for light trucks in the United States.

For the EU, the issue of duty on cars is very significant. It is much more important than steel and aluminum.

If they do not agree, this is a real trade war.

Just yesterday, Trump wrote "Duty is great", all countries go to the US to talk about duties, finally the US can get fair trading conditions (according to Trump).

However, on Wednesday, Trump's twitter reports that Trump proposes to completely zero out duties in US-EU trade. No duties, quotas, and subsidies!

This slogan looks attractive, but it is extremely difficult to implement, especially in terms of subsidies.

In general, the Trump-Juncker meeting is the most important. In a good version, negotiations will begin and everything will end with some agreement. In a bad way, the new US to EU tariffs will come into effect in August and the EU will not delay the answer. The EU is already preparing a list of goods from the US for new duties.

Note that in the US today begins a discussion of a new list of duties on goods from China. A new round of the US-China trade war. It's about fees for 16 billion dollars of goods from China. A duty of 25%, this addition to the already existing list of 34 billion dollars. Earlier, Trump demanded to impose goods from China with duties on goods in the amount of 200 billion and up to 500 billion dollars in the case of China's response. This list will begin to be discussed in the US in the 20th of August.

We are waiting for the outcome of the meeting, Trump - Juncker.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Jozef Kovach,
Analytical expert
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