"Just when there appeared to be a lull in the tariff storm, President Trump has whipped up fresh economic chaos. He's meting out punishment to European countries opposing the administration's demand that Greenland becomes part of the US, either through purchase or invasion. This is the President's modus operandi - unleash uncertainty and threats of more onerous measures, to coerce nations to acquiesce to his demands."
"There may be some relief though that military annexation plans appear to have been put on ice, and that this period of negotiation over a 'purchase' appears now to have started. But given how entrenched both sides are in their positions regarding Greenland 's future, it looks likely that the 10% tariff is here to stay for a considerable time, with an increase to 25% highly possible in June."
"For companies selling into the United States, and their customers this move creates another layer of difficult decision making. Already they've had to try and absorb the current tariffs, there will be little room to soak up any more, so this new tranche of duties is likely to end up being passed onto American customers. Many will baulk at paying higher prices, leading to lower sales, hurting exporters."
"Some importers of crucial goods may eye up the threat of a 25% tariff from June, and bring forward sales, which could provide an initial bump, but then are likely to look elsewhere for a longer-term cheaper supplier. Already business confidence has taken a dive in the UK, and this latest move will add to firms concerns. The economy did appear to be taking tentative steps forward in terms of growth, but looks set to falter once again if fresh tariffs stick."
President Trump's tariff actions have created fresh economic uncertainty by targeting European countries over the US effort to acquire Greenland, through purchase or potential military options. Negotiations over a purchase have begun while military annexation appears paused. A 10% tariff is likely to remain for a considerable time, with a possible rise to 25% in June. Additional duties leave companies little room to absorb costs, so higher tariffs will likely be passed onto American customers, reducing demand, hurting exporters, prompting some importers to advance purchases or seek cheaper suppliers, and weakening UK business confidence and growth.
Read at London Business News | Londonlovesbusiness.com
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