US consumer faces more tax hikes

Posted by: Paul Donovan

09 Apr 2019
  • US President Trump has drawn up a little list of things US consumers can be taxed for buying. The latest round of tariffs are directed at the European Union, following a World Trade Organization ruling against subsidies for Airbus. Whether the US president's newfound enthusiasm for the WTO will last if the WTO rules against Boeing in a similar case remains to be seen.
  • The good news is that this is taking place under WTO rules. The taxes will also mainly hit US consumers, who are better placed to deal with them than US companies. The bad news is that markets had just started to believe trade uncertainty would be resolved, and past US tax increases have done a lot of damage to corporate investors and equity markets.
  • Dutch manufacturing rebounded in February, but the Dutch are rather small players in global manufacturing. Italian retail sales are likely to stay weak. Revisions to Italian GDP matter to those people (in the government or EU Commission) who pretend to believe the absurdly precise fiscal forecasts.
  • A few things have happened in the EU-UK divorce. Does anyone care? No, they do not.