What I Learned This Week

The profound implications of the fraying trans-Atlantic alliance. As Washington pushes Europe closer to China, Japan and traditional U.S. allies, will the dollar suffer collateral damage?

In WILTW October 26, 2017, we wrote that increasing uncertainty over the direction of Washington’s trade policy would spur the E.U. to accelerate trade agreements with other countries. We have already seen an updated trade agreement between the EU and Mexico, and the EU is looking for fast track approval for an agreement with Japan that would, among other things, remove EU tariffs of 10% on Japanese auto imports, while eliminating Japanese duties of 30% imposed on EU cheese exports and 15% on wine exports. The upshot here is that both are traditional allies and U.S. trade partners that are being attacked by the Trump administration on trade policy. We have argued for some time that growing…

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