"The threat of tariffs shows US President Trump is prepared to escalate things in order to acquire Greenland - how Europe responds will determine the future of the island and perhaps the Western alliance. Gold surged to a record high and stocks wobbled as fresh worries about Greenland surfaced over the weekend, with the US threatened several European countries with tariffs in response to them pushing back against White House demands for the island. The threat by Trump risks reigniting a trade war with Europe, with the EU looking at retaliatory tariffs."
"Near term clearly uncertainty is elevated, which means more volatility. Trump said he would impose a 10% tariff on eight European countries, including the UK, France and Germany, on 1 February, rising to 25% in June if no agreement is struck to allow the US to acquire Greenland. EU leaders will hold an emergency meeting on the tariff threat in the coming days."
"Spot gold rallied 2% to $4,690 whilst silver jumped above $94, also hitting a fresh record high, before trimming gains. European stock markets sold off in response to the trade war worry, with the DAX and CAC down 1-1.3% in early trade. But gains for miners meant the FTSE 100 did fall too much, with Fresnillo and Endeavour leading the gold and silver plays. Defence stocks also caught some bid - they remain the big play on a fractured Nato alliance."
US President Trump threatened tariffs against several European countries to pressure them over access to Greenland, escalating the dispute. The threat includes a 10% tariff on eight countries from 1 February, rising to 25% in June if no agreement is reached. The move risks reigniting a trade war, prompting EU consideration of retaliatory tariffs and an emergency EU leaders' meeting. Markets reacted with gold and silver surging to record highs and European equities falling, while miners and defence stocks rose. Major exporters and luxury and auto firms saw share declines. Near-term uncertainty and higher volatility are expected, with potential GDP impacts.
Read at London Business News | Londonlovesbusiness.com
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