From the New York Times:
President Trump’s tariffs on China could lead to a hazardous scenario for European countries: the dumping of artificially cheap products that could undermine local industries.
China has for years presented an economic challenge for Europe. Now, it could become an economic disaster.
It produces a vast array of artificially cheap goods — heavily subsidized electric vehicles, consumer electronics, toys, commercial grade steel and more — but much of that trade was destined for the endlessly voracious American marketplace.
With many of those goods now facing an extraordinary wall of tariffs thanks to President Trump, fear is rising that more products will be dumped in Europe, weakening local industries in France, Germany, Italy and the rest of the European Union.
Those nations now find themselves trapped in the middle of Mr. Trump’s spiraling trade war with China. Their leaders are straddling a fine line between capitulation and confrontation, hoping to avoid becoming collateral damage.
“The overcapacity challenge has taken a long time, but it has finally arrived in European capitals,” said Liana Fix, a Washington-based fellow at the Council on Foreign Relations. “There is a general trend and a feeling in Europe that in these times, Europe has to stand up for itself and has to protect itself.”
Ursula von der Leyen, the president of the European Commission, has promised to “engage constructively” with China even as she has warned about the “indirect effects” of the American tariffs and has vowed to closely watch the flow of Chinese goods. A new task force will monitor imports for signs of dumping.
“We cannot absorb global overcapacity nor will we accept dumping on our market,” Ms. von der Leyen said as Mr. Trump’s tariffs went into effect.
Her tough but measured message to both China and the United States has impressed trade experts who say it may be the best chance for Europe to avoid economic disaster. Janka Oertel, the director of the Asia program at the European Council on Foreign Relations, called it a “sober” response to the threat from Beijing....
....MUCH MORE
Hazardous for Europe, hazardous for the U.S., n'est-ce pas?
The EC president was almost strident in her dumping comments, enough so that even your humble blogger got the message.
....Also at the Straits Times:
Singapore may bring forward monetary easing amid growth scare from Trump’s tariffs
Because the Straits Times assumes a high level of financial sophistication among their audience they drop little nuggets and figure their readers will pick up on them without highlighting and arrows and little rocket ships in the margins and...well here:
....MAS [Monetary Authority of Singapore] uses S$Neer as its main monetary policy tool to contain imported inflation because Singapore imports almost everything it consumes.
Deflationary shock
The move may also help MAS get ahead of another risk that can make things even worse.If Mr Trump’s harshest levies, dubbed reciprocal tariffs, on major economies such as China, Japan, South Korea and the European Union are not negotiated away by April 9 – when they take effect – their exporters will tumble over one another to sell goods their factories churn out every day, even at a loss.
This makes the global economy ripe for a massive deflationary shock – a sudden and significant decrease in general price levels, leading to lower production, lower wages, and lower demand from businesses and consumers....
This fear of exporters dumping into any market they can, just to move inventory and free up capital is something that E.C. President Ursula von der Leyen mentioned in her April 2 communiqué:
We will also be watching closely what indirect effects these tariffs could have, because we cannot absorb global overcapacity nor will we accept dumping on our market
She also said "I agree with President Trump, that others are taking unfair advantage of the current rules." without addressing any gaming of the system by various European entities.
