With President Trump threatening fresh tariffs on various economies, trade wars are back in focus. 

Moreover, the risk of the trade war spreading to a capital war has become more pressing. The EU has been considering activating its “Anti-Coercion Instrument” in response to US threats to Greenland, which could see services trade and capital flows targeted. 

Paul, Luke, and Lizzy discuss how a capital war could be the next stage of the global trade war, where the EU may have leverage over the US in such a conflict, the prospect of European institutions dumping US treasury holdings, and whether the US capital account surplus is really a chokepoint trading partners could exploit.