CURRENT ISSUES

US-China trade war is a lose-lose situation

There are no real winners in this US-initiated trade war. Countries facing new tariffs, including
the United States, experience declines in real exports and GDP. Other countries are hit
indirectly through weaker demand for their own exports, either through supply chains or in
response to weaker global economic growth. World trade suffers in a more protectionist
environment, as countries turn inward and multinational companies move production to end
markets to stay competitive.
Germany dodges recession

Germany has been affected through several channels. The conflict between the US and
China has affected the Chinese economy which is an important buyer of German vehicles
and industrial equipment. No surprise then that German economic growth has been slower
this year.
What's at stake for Boeing?

Boeing is stuck in the middle of the escalating trade war between the US and China. The trade
tension between the two nations intensified. China is Boeing largest single customer.
Campaign rhetoric of Donald Trump could prompt the Chinese government to retaliate against
Boeing, favoring Airbus for orders instead.
Therefore, China plays a crucial role in Boeing’s sustainable growth in the long term. Over
several years, China maintained an even balance for aircraft orders between Boeing and
Airbus.
However, China could use Boeing to strike back against the US. In late March, China signed a
multi-billion dollar deal with Airbus. The deal was seen as a retaliation against President
Trump’s tariff hike on steel and aluminum on March 8. President Jinping signed the agreement
during his Paris visit in March. China agreed to purchase 300 Airbus aircraft worth 30 billion
euros or $35 billion at the list price.