Barbs Fly At North Atlantic Tariff Organisation

Prepared by Jeff Halley, Senior Market Analyst

President Trump’s comments that a trade deal may not happen until after the 2020 election sent stock markets into a tailspin overnight, and are spilling over into the Asia Pacific this morning. One thing that isn’t clear to me, though is if the President was referring to the interim or the final trade agreement with China. With the December 15th tariff-day massacre looming, the warnings made in previous notes seem, sadly, to be ringing true. That capped a grim day for the interim trade-deal global recovery FOMO trade of the last two months, with barbs also flying between the Europeans and the US President, who ostensibly in London for NATO’s 70th anniversary.

France and Europe have both threatened to retaliate with their own tariffs if the US imposed tariffs on France over their digital business tax. It has left NATO looking more like the North Atlantic Tariff Organisation, rather than the North Atlantic Treaty Organisation. Instead of collective security, we appear to be heading down the path of collective insecurity. Expect the US President today to berate some members, and rightly so Germany, for not meeting their required defence spending as a percentage of GDP requirements. At least the Russians will be happy.

Asia is likely to receive another kick on the ground today to go with the trade delay beating of last night. The US House of Representatives has just passed another China Bill by 407 to 1 that would impose sanctions on Chinese officials involved with the repression of their Uigur minorities. The Bill itself is an amended version of a Senate one passed in September, and the odds are likely that a joint bill between to two houses will be passed sooner, rather than later.

The Bill itself is potentially

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