Trump Going Tariff Crazy; Rejects EU Offer of Zero Taxes on Autos

No one knows what exactly is the end game here with the tariffs. I am beginning to suspect he doesn’t want to broker deal, but instead have the taxes in order to reduce the deficit. If you recall, Trump is the one who wanted to remove tariffs with the EU — now it isn’t good enough.

The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready – but they won’t!

— Donald J. Trump (@realDonaldTrump) July 25, 2018

Source: ZH

EU olive branch.

“We said that we are ready from the EU side to go to zero tariffs on all industrial goods, of course if the U.S. does the same, so it would be on a reciprocal basis,” Malmström told the European Parliament’s trade committee. Sending the ball in the Trump’s court, she said that “we are willing to bring down even our car tariffs down to zero … if the U.S. does the same,” adding that “it would be good for us economically, and for them.”

And Trump garbage can.

“It’s not good enough,” Trump told Bloomberg News during his extended interview, in response to the EU proposal. The reason: “their consumer habits are to buy their cars, not to buy our cars.”

Trump then said that the “the European Union is almost as bad as China, just smaller.”

If we are to go down this road and protectionism is truly the narrative for 2019, you’re gonna want to allocate into small caps, who are largely exposed to the domestic market, immune to the pangs of trade war.