President Trump jets into London today for a NATO meeting, and I wouldn’t be surprised if he emerges from Air Force One wearing camo-paint, a headband and belts of M-60 ammunition hanging across his chest.
Tariff Man was back with a vengeance overnight, roiling financial markets, as President Trump re-imposed tariffs on Brazilian and Argentinian and . Their sin, having economic crises that had weakened their currencies which had, in turn, allowed them to sell gargantuan amounts of agricultural products to China, thus undercutting U.S. farmers.
The frightening lack of understanding of basic economics aside, President Trump than berated the Federal Reserve for not cutting interest rates to zero, and then threatened to impose 100% tariffs on French goods over their new digital tax. The transfer pricing of big tech via low tax regimes is a global issue, and the French tax likely reflects its frustration with the international lack of progress on this front.
The French move is not without precedent, though, both Facebook (NASDAQ:) and Google (NASDAQ:), for example, have agreed or are already paying taxes locally in Indonesia. Maybe don’t tell the President that.
The EU also lost another WTO hearing yesterday over illegal aid to Airbus (PA:). The EU intends to appeal, but that didn’t stop the U.S administration from threatening to increase tariffs on the Airbus partner countries in Europe, all of whom are also members of NATO I might add.
So yesterday wasn’t world trades finest hour and nor was it for the U.S. The data underperformed along with all its sub-indices. The U.S. though, outperformed, as it had in both and most of Asia earlier in the day. It was ignored though, with asset markets taking fright.
A continued lack of detail on the U.S.-China trade negotiations thrown into the volatile mix saw