The markets have opposed another week of roller coaster while the most punitive prices of Donald Trump come into force and the world leaders assess the action of reprisals, adding to the fears of a global recession.
The stock market indices plunged nearly $ 5 billion (3.9 TN £) last week, with markets in the United Kingdom and the United States which have suffered losses not seen since the first days of the COVVI-19 pandemic, while investors have covered themselves from the opening bundles of the Trump trade war.
Without a sign of the Trump administration to row on its so-called “Liberation Day” rates, analysts warned against the turbulence of the persistent market and an increased risk of total recession in the United States, the United Kingdom and the EU.
Roman Ziruk, principal analyst of the World Society of Financial Services Ebury, said: “Volatility will probably remain high as we enter (week).”
He said some investors were still waiting for the hope that the prices against China and the EU, which should start on Wednesday, would be delayed or renovated.
“The danger of climbing trade tensions cannot however be overlooked, especially since China’s response to the last American rates was more aggressive than before,” said Ziruk.
However, the main figures of the Trump administration warned on Sunday against turnover expectations. Speaking in television interviews, Howard Lunick, trade secretary, said that the American president intended to “reset world trade”.
EU leaders are still considering their response, while Keir Starmer, the British Prime Minister, is committed to “sheltering” British companies in the prices, indicating that he will announce the measures he plans to take this week to come.
Starmer should continue an economic reset, which could ultimately include a rethink of the work promise not to increase taxes, in anticipation of a worldwide slowdown.
On Sunday, the Minister of the Treasury, Darren Jones, told the BBC that the era of globalization had “ended”, although he declared that the United Kingdom was still hoping to conclude a trade agreement with the White House.
The rate of 10% imposed in the United Kingdom is at the lowest end of the range of Trump prices, with the exception of Russia, North Korea, Belarus and Cuba, which have been excluded from the global commercial dispute.
But Trump had already imposed a price of 25% on steel and British cars, a measure that prompted Jaguar Land Rover to say during the weekend that she was taking a break for the United States, which buys approximately a quarter of the 400,000 vehicles that the company sells each year.
Economic forecastists have said that the surprisingly widespread and punitive nature of prices could still lower the British economy.
Barclays analysts said the United Kingdom and the EU were likely to fall into the recession in the second half of this year and that they revised their growth forecasts for the two economies, as well as for the United States.
Erik F Nielsen, the chief economy adviser to Unicredit Bank, said: “It is too early to estimate the impact of these economic weapons of mass destruction.
“But it will be bad – very bad – for American growth, and for growth in the rest of the world. A recession in the United States, perhaps even a global recession, have become separate possibilities.”
After promoting the newsletter
On Saturday, the richest person in the world, Elon Musk, who has become the most powerful Trump ally in the world of world affairs, told a meeting of the Italian right league party that he hoped that a “free trade area” between the EU and the United States could be created, without any price.
But the 20% rights on European imports in the United States technically enter a minute after midnight Wednesday, as is the rate of 34% for China, the world’s largest export nation, and others considered by the White House as among the “worst delinquents”, which include Japan and Vietnam.
The leaders of European countries condemned the prices, while the French president, Emmanuel Macron, seemed to appeal to companies in the country to interrupt investments in the United States.
The president of the European Commission, Ursula von der Leyen, called for negotiations with the United States. However, the EU should announce reprisals on American consumer goods and industrialists – which are likely to include emblematic products such as orange juice, Denim and Harley -Davidson in motorcycles – in mid -April in response to steel and aluminum prices previously announced by Trump.
While Beijing has already responded with reprisal prices, George Magnus, an expert in the Chinese economy, said that a longer -term agreement was still possible.
“Neither Trump ni (Chinese President) XI Jinping want a full -fledged trade war at the moment,” said Magnus, former chief economist of the Swiss bank UBS and research partner at the China Center at the University of Oxford and at Soas University in London.
“Trump must show voters that the use of prices for income and the lever effect works without placing the US economy by a detrimental slowdown or recession,” he said.
“XI has its own deeply anchored economic problems (…) without having to manage a harmful external trade war. A big blow to exports would have deep consequences on growth and employment. ”
However, he warned of Trump’s long -term implications trying to loosen the grip of China on global supply chains, while Beijing continues to try to stimulate exports.
“The world must either pay Trump now via prices or pay Xi Jinping later by manufacturing and lost jobs,” he said.
