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World leaders flock to Swiss alpine town of Davos for World Economic Forum

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World leaders flock to Swiss alpine town of Davos for World Economic Forum

world economic forum 2020
Photo: AP

Business leaders and heads of state from around the globe will gather in Davos, Switzerland for the World Economic Forum Annual Meeting today. Recent trade spats between the US and the EU are likely to dominate the agenda.

Disagreements over plane subsidies, France’s new digital services taxes and a host of other issues has left the US considering raising tariffs on France as well adding tariffs on $10 billion worth of European goods.

The US argues that France’s digital services tax and government subsidies for certain transportation industries are unfavourable to the country’s trade with Europe.

Despite this, there is a fair chance that the US holds back on tariffs, as it is expected to work with the EU at Davos to discuss amendments to the WTO. The proposed amendment seeks to crack down on state subsidies, which is a collective effort by the US and the EU that takes aim at Chinese subsidisation of dominant industries.

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If the US and the EU agree on amendments to the WTO—which would also force some EU states to stop subsidising certain industries—the US could hold back tariffs it has threatened to levy. On the other hand, if an agreement isn’t reached, expect duties on somewhere between $7.5 billion and $10 billion of European goods to be advanced.

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