A trade war followed by a currency war. In early 2018, Donald Trump announced that he was putting tariffs on imported aluminium and steel – the opening shot in a trade war that has seen the US and China engage in tit-for-tat action over the past year. The US sees the EU as just as big a threat as China, and is prepared to open up a second front in the trade war. Make no mistake, this has the potential to turn nasty. As was eventually understood in the 1930s, beggar-thy-neighbour currency devaluation is a zero-sum game that is extremely hard to win.

Source: The Guardian June 23, 2019 06:00 UTC