Global markets are facing volatility after President Donald Trump vowed to slap tariffs on eight European nations until the U.S. is allowed to buy Greenland, news that pushed the euro to a seven-week low in late Sunday trading.<\/p>\n
Trump said he would impose an additional 10% import tariff from February 1 on goods from \u200dDenmark, Norway, \u200bSweden, France, Germany, the Netherlands, Finland and Britain, which will rise to 25% on June 1 if no deal is reached.<\/p>\n
Major European Union states decried the tariff threats over Greenland as blackmail on Sunday. France proposed responding with a range of previously untested economic countermeasures.<\/p>\n
As early trade kicked off in Asia-Pacific, the euro fell 0.2% to around $1.1572, its lowest since November. Sterling also dipped, while the yen firmed against the dollar.<\/p>\n
\u201cHopes that the tariff situation has calmed down for this year have been dashed for now – and we find \u2060ourselves in the same situation as last spring,\u201d said Berenberg chief economist Holger Schmieding.<\/p>\n
Trump\u2019s sweeping \u201cLiberation Day\u201d tariffs in April 2025 sent shockwaves through markets. Investors then largely looked past U.S. trade threats in the second half of the year, viewing them as noise and responding with relief as Trump made deals with Britain, the EU and others.<\/p>\n
While that lull might be over, market moves on Monday could be dampened by the experience that investor sentiment had been more resilient than expected in 2025 and global economic growth stayed on track.<\/p>\n
U.S. \u200cmarkets are closed on Monday for Martin \u200dLuther King Jr. Day, which means a delayed reaction on Wall Street.<\/p>\n
The implications for the dollar were less clear. It remains a safe haven, but \u200dcould also feel the impact of Washington being at the center of geopolitical ruptures, \u200cas it did last April.<\/p>\n
Bitcoin, a liquid proxy for risk that is open to trade at the weekend, was steady, last trading \u2060at $95,330.<\/p>\n
Capital Economics said countries most exposed to increased U.S. tariffs were the UK and Germany, estimating that a 10% tariff could reduce GDP in those economies by around 0.1%, while a 25% \u200btariff could knock 0.2\u20130.3% off output.<\/p>\n
European stocks are near record highs. Germany\u2019s DAX and London\u2019s FTSE index are up more than 3% this month, outperforming the S&P 500, which is up 1.3%.<\/p>\n
European defense shares will likely continue to benefit from geopolitical tensions. Defense stocks have jumped almost 15% this month, as the U.S. seizure of Venezuela\u2019s Nicolas Maduro fueled concerns about Greenland.<\/p>\n
Denmark\u2019s closely managed crown will also likely be in focus. It has weakened, but rate differentials are a major factor and it remains close to \u200bthe central rate at which it is pegged to the euro, and not far from six-year lows.<\/p>\n
\u201cThe U.S.-EU trade war is back on,\u201d said Tina Fordham, geopolitical strategist and founder of Fordham Global Foresight.<\/p>\n
Trump\u2019s latest move came as top officials from the EU and South American bloc Mercosur signed a free trade agreement.<\/p>\n
HOT SPOTS EVERYWHERE<\/p>\n
The dispute over Greenland is just one hot spot.<\/p>\n
Trump has also weighed intervening in unrest in Iran, while a threat to indict Federal Reserve Chair Jerome Powell has reignited concerns about the U.S. central bank\u2019s independence.<\/p>\n
Against this backdrop, safe-haven gold remained near record highs.<\/p>\n
Given Trump\u2019s recent Fed attacks, an escalation with Europe could pile pressure on the dollar if it \u2060adds to worries that U.S. policy credibility is becoming critically impaired, said Peel Hunt chief economist Kallum Pickering.<\/p>\n
\u201c(This) could be amplified by a desire, especially among Europeans, to \u2060repatriate capital and shun U.S. assets, which may also pose downside risks to lofty U.S. tech valuations,\u201d he added.<\/p>\n
The World Economic Forum\u2019s annual risk perception survey, released before its annual meeting in Davos next \u200cweek, which will be attended by Trump, identified economic confrontation between nations as the number one concern replacing armed conflict.<\/p>\n
A source close to French President Emmanuel Macron said he was pushing for activation of the \u201cAnti-Coercion Instrument,\u201d which could limit access to public tenders, investments or banking activity or restrict trade in services, in which the U.S. has a surplus with the bloc, including digital services.<\/p>\n
\u201cWith the U.S. net international investment position at record negative extremes, the mutual inter-dependence of European-U.S. financial markets has never been higher,\u201d said Deutsche Bank\u2019s global head of FX research George Saravelos in a note.<\/p>\n
\u201cIt is \u200ca weaponization of capital rather than trade flows that would by far be the most disruptive to markets.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Global markets are facing volatility after President Donald Trump vowed to slap tariffs on eight European nations until…\n","protected":false},"author":2,"featured_media":418291,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-418290","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/418290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=418290"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/418290\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/418291"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=418290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=418290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=418290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}