The US has aggressively employed bail-outs and stimulus programs to help banks, auto companies and the overall economy. Now Argentina and 15 other countries are bringing a grievance to the WTO that these programs are industrial subsidies. They provide an unfair advantage in international trade and should allow retaliation by other member countries.
The longer the recession as lasted the more likely there will be a trade war. This is especially the case given this global recession is driven by such a large decrease in trade. Countries have seen 20+ percent declines in exports and similar declines in industrial production. This countries to have the same access to capital markets, so the US and Europe can deficit finance bail-outs to their home country industries. GM is a case in point. The "Buy American "language in the stimulus package is another example.
This could start a wave of tit-for-tat actions which will further retard global growth.
The longer the recession as lasted the more likely there will be a trade war. This is especially the case given this global recession is driven by such a large decrease in trade. Countries have seen 20+ percent declines in exports and similar declines in industrial production. This countries to have the same access to capital markets, so the US and Europe can deficit finance bail-outs to their home country industries. GM is a case in point. The "Buy American "language in the stimulus package is another example.
This could start a wave of tit-for-tat actions which will further retard global growth.
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