US President Donald Trump may shortly be issuing new duties against the EU.
In fact, as Politico reports, a few days ago the United States obtained the green light to impose defined “punitive” duties on the products from the European Union, as a consequence of the illegal subsidies granted to the European aerospace giant Airbus.
The World Trade Organization (WTO) has spoken out in favour of the United States over the dispute that has been going on for years, effectively authorising President Trump to impose billions of dollars in duties on European products entering the United States.
According to a WTO official, the US now has the right to collect a total of between 5 and 8 billion euros in duties, while according to another official the maximum amount applicable would be close to 10 billion dollars.
The US government has already prepared a list of EU products to choose from for the new duties.
The ruling should be finalised and enter into force in “a few weeks”.
The Airbus case had been under examination for at least ten years and concerned allegations made against certain EU countries that allegedly illegally supported Airbus by granting it subsidised loans known as “launch aid” and other advantages for the development of the A350 and A380 models.
A spokesman for the European Commission said that the European Union would be ready to work on a ‘fair and balanced solution’ with the US, but the hypothesis that Trump might instead take the opportunity to impose new duties seems more plausible.
If this were indeed the decision of the US President, a situation would arise between the US and the EU similar to that which has occurred in recent months between the US and China, and which has led the Asian country to take the decision to devalue the local currency.
In fact, in the last six months, the yuan has lost more than 5% of its value against the US dollar, with a decline that began in early May and had its lowest peak in early September.
According to many analysts, the devaluation of the yuan would be the Chinese response to Trump’s duties, and among other consequences, it would also have had the effect of inducing more Chinese to buy bitcoin, in an attempt to protect themselves from the devaluation of their currency.
Since it is unlikely that the EU will be able to use different measures to cope with the increase in duties, it is possible to assume that the ECB could also opt for a strategy similar to the Chinese one, and begin to devalue the euro against the US dollar.
Besides, the euro has already lost some ground against the dollar in the last six months, albeit to a lesser extent than the yuan, which actually saw a sharp fall today.
On top of this, the ECB’s new Quantitative Easing (QE) plan, which will once again create money and put it on the financial markets, appears to be weakening the outlook for the euro, particularly against the dollar.
This could also generate an increase in bitcoin purchases in Europe, as recently happened in China.
In other words, after favouring bitcoin in China, the Trump duties could end up favouring bitcoin in the EU as well.