Morning Market Roundup: EU Carbon Tax May Lead to Trade War, Asian Exports Shrink, Oil 8-Month Low

Here’s what’s important in the business world this morning:

EU Carbon Tax: The global aviation industry group warned Tuesday that governments might be moving toward a trade war over Europe's carbon charges on airlines and appealed for a negotiated settlement.

China, India, Russia and 26 other governments that oppose the charges issued a joint declaration in February that cited possible retaliatory steps such as imposing charges on European airlines.

"The last thing that we want as an industry is a trade war," said Paul Steele, director of environmental issues for the International Air Transport Association, at an industry conference in Beijing.

"The problem is that the way things stand right now, I think we are on the brink of something like that happening," he said.

The European Trading System requires airlines that fly to and from Europe to buy permits for all the carbon they emit en route. The charges took effect Jan. 1 but airlines will not be required to pay until next year.

As mentioned earlier on The Blaze, China and India have prohibited their airlines from cooperating and Beijing has blocked purchases of European aircraft by its carriers in protest. European courts have rejected legal challenges by U.S. airlines, supported by governments including China and India.

Asian Exports: Big markets in Europe and the U.S. no longer seem so rich or reliable and Asian countries, while fast-growing, cannot pick up all the slack.

As an austerity-weary Greece votes this weekend in elections that could determine if it stays in the euro and Spain's ailing banks get bailout money, Asia is girding for a worsening Europe crisis that has already stifled demand for exports that have powered growth and given hundreds of millions a higher standard of living.

One of the biggest concerns in Asia is that a sudden Greek exit from the euro common currency will spark panic and freeze global credit such as in the aftermath of the Lehman collapse in 2008.

How China weathers the European crisis will serve as a harbinger for the rest of Asia. China is not only the region's biggest economy and exporter but it has become the top destination for other leading Asian exporters such as Japan, South Korea and Taiwan. They feed China's growing domestic market and manufacture many of the components which make up its exports.

Oil: Oil touched an eight-month low near $81 a barrel Tuesday in Asia amid concern Spain's bank bailout won't be enough to stem Europe's debt crisis.

Benchmark oil for July delivery was down $1.15 to $81.55 per barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Earlier on Tuesday, oil dropped to $81.07, the lowest since October. The contract fell $1.40 to settle at $82.70 in New York on Monday.

In London, Brent crude for July delivery was down 98 cents at $97.02 per barrel on the ICE Futures exchange.

The Associated Press contributed to this report.