European shares at record high as US-EU trade tensions ease

Andrew Cummings
January 19, 2020

'Its full impact will depend on how the deal is implemented, including whether China can meet its commitment to dramatically increase imports from the USA, as well as possible trade diversion effects on other exporting economies, ' Coulton said.

In point of fact, aside from a US-China "Phase 1" trade deal that was signed off earlier this week, Hogan's Thursday's (January 17th) riant comment about Brussel's desire to resolve a raft of trade disputes with the United States had played a pivotal part on Friday's (January 17th) European shares' rally.

Mr Hogan said Ms von der Leyen had come out of this meeting and thought "we need to set priorities on aspects of the agreement" if the United Kingdom is to end the transition period in late 2020.

The WTO's principle of most-favoured-nation treatment says countries can not discriminate between trading partners.

EU Trade Commissioner Phil Hogan does not believe that the United States government would actually end security and intelligence co-operation with the UK over Huawei, reports The Guardian.

Beijing also pledged to improve protections of USA intellectual property.

"It's a good start", he said.

But punitive border taxes will remain on two-thirds of more than $500 billion in imports from China.

"This deal may cause short-term relief, but it's just a stage, ' said Sylvain Broyer, European chief economist at Standard and Poor's, calling it 'the tip of the iceberg" of global trade tensions.

"If we go about this in the right way, working together, the mutual benefits can be very significant", Hogan told a conference in the USA capital on Thursday.

China's agreement to buy more from the USA in effect cushions some of the impact from increased tariffs over the past two years, Tan added.

Hogan said Trump is misguidedly "obsessed" with a US deficit in goods trade with the bloc and should also take into account services, where the country has a $60 billion surplus.

He noted, however, that such bilateral trade deals seem to be the USA administration's preferred method of developing economic relations with its major trading partners, rather than through the WTO - meaning further trade disputes with the U.S. will have to be resolved outside the global trading system.

'The EU would defend its rights in a determined and proportionate way against American measures that would be illegal in the eyes of the WTO'.

In the US, Mr Hogan has been discussing transatlantic trade with president Donald Trump's representatives.

The US has long-standing and wide-ranging concerns about the WTO, with its allegedly soft stance on China a main criticism.

"We reject the USA labelling the European Union as a security risk in order to justify the imposition of tariffs", he said.

Overall, he said the two sides have made progress to avoid a trade war.

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