May 13, 2019

EU Reduces Growth Predictions As Worries About Global Trade Rise

As the trade conflict between the United States and China re-erupted last week, according to The Associated Press, the European Union (EU) Commission made it clear the effects will reverberate worldwide. The commission reduced its expected rate of growth for the EU due to uncertainty over trade relations with the United States and weakness in some European economies.

Specifically, the commission lowered its outlook for growth for 2019 in the 19 countries that use the euro currency to 1.2 percent from 1.3 percent in its previous forecast in February. The estimate for 2020 was cut to 1.5 percent from 1.6 percent.

The United States and the European Union are engaged in trade discussions, but those talks are in the beginning stages and, at this point, remain subordinate to the issues concerning China and United States Mexico Canada Agreement. As Connecting the Dots has reported, the EU continues to insist that agriculture will not be a part of the scope of talks while the US maintains that it should be included. The United States’ Section 232 steel and aluminum tariffs also pose a barrier to successful discussions.