Merrill råber nærmest vagt i gevær ved udsigten til en handelsstrid mellem USA og EU, fordi handelen ugør over halvdelen af den amerikanske handel. Markederne skal ikke lade berolige af den nordamerikanske aftale og førstedelsaftalen med Kina.
Uddreag fra Merrill:
While a revamped North American Free Trade
Agreement (NAFTA) agreement with Mexico and Canada, along with the Phase One deal
with China have assuaged market fears over trade, there is one more front in the U.S.
trade battle: Europe.
Escalating U.S.-Europe trade tensions represent a tail risk to the capital markets this
year because if the two parties do end up tangling over trade, it would be another
heavyweight match akin to the U.S. and China bout, with global reverberations.
The European Union is hardly a lightweight—inclusive of the United Kingdom, the
European Union is an $18.3 trillion economic behemoth, with a population of 500 million
people and a per capita income of around $37,000. China: $14.1 trillion in output, with
1.4 billion people and a per capita income ($10,000) a fraction of Europe’s.
Wealth equates to income, which drives consumer spending, which determines corporate
profits. Hence, when it comes to the bottom line of Corporate America, Europe matters
more—much more—than China and any other part of the world for that matter. As
Exhibit 2 depicts, Europe accounted for 54% of total U.S. foreign affiliate income (a
proxy for U.S. global earnings) in the first nine months of 2019, with Asia (19.1%) and
Latin America (17.4%) a distant second and third.
Worrisomely, it is Europe that is now in the cross hairs of U.S. trade negotiators, with the
U.S. threatening tariffs on autos, in addition to the tariffs already levied on French wine,
Italian cheese and other goods, stemming from the Airbus trade dispute. Complicating
the picture: the United Kingdom’s post-Brexit attempts to broker a trading agreement
with both the European Union and the United States. How each agreement is crafted
and implemented will ultimately affect trade and investment flows between the United
Kingdom and Europe, and the United States and the United Kingdom.