Beneficiary US sanctions? The EU fears a trade war with America

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looming trade warUS benefits from sanctions – anger grows in Europe

Next to Russia, Europe suffers the most from sanctions. Now the US is luring European companies to the country with massive subsidies. Europe is angry.

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Europe is replacing Russian gas and oil with supplies from the US.

Reuters

Because of high energy prices, US suppliers are making a profit of $200 million per tanker.

Because of high energy prices, US suppliers are making a profit of $200 million per tanker.

Reuters

High energy prices are bad for the European economy.  But now US President Joe Biden has also announced a massive subsidy package in the US.

High energy prices are bad for the European economy. But now US President Joe Biden has also announced a massive subsidy package in the US.

Reuters

It’s about it

  • Sanctions against Russia are also hitting Europe hard.

  • Now the US is planning a law against Europe.

  • According to experts, a trade war is imminent.

The war in Ukraine appears to be shifting the global power structure. Videos are piling up on Tiktok in which the US is labeled as the main beneficiary of the war at the expense of Europe.

Many blame the US for the attack on gas pipelines in the Baltic Sea be responsible. America now wants to rob European companies with massive subsidies. All conspiracy theories or even Putin propaganda?

It is still unclear who is responsible for the attack. However, the US is increasingly replacing Russia as Europe’s gas supplier with liquid gas tanker deliveries at horrendous prices on the spot market (see box).

$200 million profit per tanker

American suppliers make a living supplying gas to Europe. According to «Business Insider», thanks to higher local prices for the tanker, they have a profit of up to 200 million US dollars.

Europe is currently negotiating long-term supplies with US suppliers at better prices for up to 25 years. But because of overseas shipping and complex gas liquefaction, costs remain significantly higher than in the US.

The American economy already has an advantage over EU competition, says French Economy Minister Bruno Le Maire “Handelsblatt”. He also says that hundreds of billions of dollars in the anti-inflation bill in the US, for example on electric cars, goes against Europe.

imminent collapse

The subsidies are up to ten times higher than the maximum allowed by the EU. It warns of a crash and drastic consequences on labor markets. Apart from China, the field should not be left to the US. Some large companies that wanted to invest in Europe were already hesitating between Europe and the US.

Apart from Russia, Europe is suffering the most from sanctions and the consequences of the energy crisis, says Matthias Geissbühler, head of investment at Raiffeisen Switzerland, on 20 minutes. “Overall, the US is in a much better position as a net energy exporter, and the US has become more attractive as an industrial location,” says Geissbühler.

High energy prices make it almost impossible for European heavy industry to continue manufacturing in Europe. According to Geissbühler, many of them are likely to migrate to the US or other countries.

“Joe Biden Exacerbates Trade Conflict”

Expert Raiffeisen says about the subsidy law: “American President Joe Biden continues the America First approach of his predecessor Donald Trump and simply calls it something else.” Under Biden, the trade conflict has worsened the ban on the export of chips to China even worse.

Sea “Focus” is now mainly built by German automakers in the USA. But in Switzerland, according to Geissbühler, the risk of emigration is less great. Apart from niche niche players, much of the industry has already moved production to cheaper countries and often only conduct research and development in that country.

The French newspaper “Le Figaro” now reports on the specter of a trade war. EU states are asking the US to remove several measures from the law. Otherwise, retaliatory measures should be considered. The task force should now be the mediator.

Geissbühler warns of the consequences of a possible trade war. “That would be bad for the global economy, the bottom line would be everybody loses.” Instead of sanctioning the plant, he recommends making one’s own locality more attractive, for example by reducing bureaucracy and taxes.

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