Tomorrow marks the end of the exemptions from US taxes on steel and aluminum. US President Trump reversed 65% of steel taxes and 55% of aluminum taxes – but there was a time limit. Economists will monitor the Trump Twitter Feed for policy signals (so far, the Twitter Feed has been occupied with other matters).
Taxing US consumers of European steel and aluminum may lead to European retaliation. However, companies will be creative. Rather than making cars in the US with imported steel, companies may choose to make cars outside the US with foreign steel. Foreign steel is still sold in the US. It is just packaged in the form of a car. Complex supply chains make 19th century style tariffs rather unsuitable for the 21st century.
The Germans and Italians offer preliminary April consumer price inflation, creating a contrast between a stronger and a weaker European economy. The US offers the personal consumer expenditure deflator. This is favored by the Federal Reserve, but markets weight consumer price inflation measures more highly.
The UK home secretary has resigned. This would normally be a matter of supreme indifference for markets. However, on this occasion, it raises questions about the strength of pro-Europeans in the government.