"By now we have grown accustomed to Trumps strategy of threatening nations with tariffs in a bid to get what he wants, but this occasion appears to have taken it a step too far. For many of the European leaders, this is a warning sign that their US partners are no longer reliable for as long as Trump is in power."
"In Europe, this means that there will be a greater desire for self-sufficiency and a gradual weakening in the interconnectedness seen with the US over the years. China are likely to be one of the main benefactors of that shift, with the likes of Canada and Europe already turning their attention Eastward in a bid to reduce exposure to their unreliable partners in the West."
Global markets relaxed after the US President's Davos trip yielded a promise to avoid military intervention and an apparent deal that prevents February tariffs. Repeated tariff threats under Trump have eroded trust, leading European leaders to view the US as an unreliable partner and raising risks of recurrent demands for new deals. Russia and China remain relatively insulated, prompting Canada and European countries to pursue greater economic self-sufficiency and pivot eastward. European fiscal constraints make additional defense or strategic spending costly, potentially lifting borrowing costs and precious-metal valuations. A preliminary NATO-US deal eased some concerns but faces Danish and Greenlandic pushback. Core PCE inflation data will refocus markets.
Read at London Business News | Londonlovesbusiness.com
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