U.S. President Donald Trump said on Tuesday the United States would impose tariffs on $11 billion of EU products. The two sides have been locked in a years-long global trade dispute.
“The EU has taken advantage of the U.S. on trade for many years. It will soon stop!” Trump tweeted as he vowed to put tariffs on $11 billion of EU products. The move comes a day after the U.S. Trade Representative proposed a list of products targeted for tariffs tit-for-tat for European aircraft subsidies. Goods on the list range from large commercial aircraft and parts to dairy products and wine. Meanwhile, the EU has started preparing to retaliate over Boeing subsidies, an EU official said on Tuesday.
The moves come as the record subsidy dispute, which has been grinding its way through the WTO for almost 15 years, reaches a climax, with both sides in arbitration to decide the size of any countermeasures.
START TRADINGForex – Tariffs imposed by Trump on $11 billion EU imports
Commodity currencies propelled by crude oil price rally on Tuesday, aided by a surge in oil prices to five-month highs. Oil prices have rallied on expectations that global supplies would tighten due to fighting in Libya, OPEC-led cuts and U.S. sanctions against Iran and Venezuela, although energy prices slipped slightly on Tuesday. Foreign exchange moves elsewhere were limited on Wednesday.
Sterling trimmed early gains on Tuesday after a German government spokesman denied a media report that Chancellor Angela Merkel was willing to put a time limit on the Northern Ireland backstop in Britain’s EU withdrawal agreement. It had climbed as much as nearly half a percent to $1.3122 after the report, compared with $1.3076 earlier. It had also strengthened a third of a percent against the euro to 86 pence.
The U.S. dollar fell for a second consecutive day while Washington’s proposed list of tariffs on European goods had no immediate impact on the euro. The greenback slipped 0.1% against a basket of rival major currencies to 96.914, its second day of losses.
With traders also positioning for Wednesday’s European Central Bank meeting, the euro rose 0.2% to $1.1277.
The Japanese yen gained 0.2% to 111.29 yen per dollar.
The Australian dollar added 0.3% to $0.7151 after earlier touching a three-week high.
Canada’s currency firmed to C$1.3293, its strongest since March 21, before falling back to C$1.33.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.