Global stock markets may face declines when trading resumes on Monday, following Donald Trump’s threat to impose tariffs on eight European countries unless they support his bid to acquire Greenland.
Trump plans to introduce a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1, increasing to 25% by June 1. This announcement has caused uncertainty in the markets, especially among European businesses.
Weekend trading data hinted at a 0.9% drop for the FTSE 100 in London. Wall Street, which opens on Tuesday, is also expected to see a decline. As anxiety grows over these developments, investors are flocking to safer assets like gold, which rose 0.6% to $4,625 an ounce. This brings it close to its recent record high of $4,642.
Market analysts are concerned about the impact of these new tariffs. “This situation has intensified worries about NATO alliances and disrupted trade agreements,” said Tony Sycamore, a market expert at IG. Susannah Streeter, chief investment strategist at Wealth Club, called it an “economic chaos” and a setback for the UK.
European leaders have pushed back against Trump’s tariffs. UK Prime Minister Keir Starmer and European Commission President Ursula von der Leyen criticized the decision, as it risks undermining NATO. The German engineering association, VDMA, urged the EU to consider countermeasures against the US, calling the tariffs a slippery slope that could lead to further unreasonable demands.
The auto industry in Germany is particularly concerned about the potential costs of these tariffs. Hildegard Müller, head of the German auto industry group, warned that these fees would be significant for European industries.
With trade being essential for economic growth, experts like William Bain from the British Chambers of Commerce emphasize the need for collaborative solutions. He stated that the focus must be on reducing tariffs and successfully implementing last year’s stalled UK-US trade deal.
As the situation unfolds, it remains to be seen how markets will react and what strategies European nations might adopt in response to Trump’s aggressive tariff stance.
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