MNI BRIEF: Tariffs Likely To Increase Chinese Competition -ECB

Current U.S. trade policy and the imposition of tariffs are likely to increase Chinese competition across European markets, challenging local producers both at home and in the export markets of third countries, the ECB said in an article on its Economic Bulletin released on Wednesday.

“While euro area firms may gain some competitive advantage in U.S. markets relative to China because tariffs on China are comparatively higher, this is unlikely to offset losses in the domestic market,” the article said focusing on the impact on European jobs losses due to Chinese penetration and moving away from a low added value goods economy.

While the current impact is concentrated onvehicles and chemicals, the broader implications might extend to almost one third of euro are employment due to the indirect implications of these industries, the article said. Better access to US markets relatively to China is unlikely to offset losses in the domestic market, the ECB added.