Europe: Trade War with U.S.?
The Wall Street Journal reports:
European leaders, many of whom are gathering in Davos, Switzerland, this week for the World Economic Forum, are considering the bloc’s options to retaliate, including imposing tariffs on more than $100 billion of American goods, and making it harder for American multinationals to bid on European contracts. A trade war would be devastating for Europe, which already suffers from stagnant growth.
Economists said tit-for-tat tariffs probably won’t cause a recession in the U.S. but could slow growth, hit an already-sluggish domestic manufacturing sector and push up prices for consumers and businesses as the U.S. is already struggling to get inflation back to comfortable levels.
In the long run, worsening ties could lead Europe to lessen its dependence on the U.S. and deepen trade ties elsewhere, weakening a relationship that has been a driver of prosperity on both sides of the Atlantic.
PHOTO: Christian Lue, Unsplash