Stock markets Tariffs threat raises fears of turbulence

Political nightmare may herald an economic one as uncertainty grows for firms and markets

- Graeme Wearden

Global stock markets are bracing for falls when trading resumes today after Donald Trump threatened eight European countries with fresh tariffs until they support his ambition to acquire Greenland.

The US president's plan to impose trade levies of 10% on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland from 1 February, rising to 25% on 1 June, is creating fear in the markets and among businesses.

Trading on the broker IG’s weekend markets suggested there would be losses on the London Stock Exchange when it reopens, while rising geopolitical fears could drive precious metal prices to record highs. Wall Street, which reopens tomorrow, is also on track for a fall.

"This latest flashpoint has heightened concerns over a potential unravelling of Nato alliances and the disruption of last year’s trade agreements with several European nations, driving risk-off sentiment in stocks and boosting safe-haven demand for gold and silver," said Tony Sycamore, a market analyst at IG.