Global scholarships no longer know what foot dancing, faced with Donald Trump’s announcements concerning the drastic increase in customs duties on imports. Just over a month after the billionaire inauguration, the main American indices plunged into red Tuesday, March 4. Followed by the European scholarships, which ultimately skyrocketed on Wednesday March 5. This panics of the markets reflect a concern for the effect of the presidency of Donald Trump on the economy of the federal states, now that the financial markets have understood that they should deal with a level of uncertainty to which they were not at all used to. And find themselves suspended from economic tensions between the United States and nations which were once their main business partners.
Tuesday, March 4, confirmation of a drastic increase in customs duties to 25 % on Mexican, Chinese but also Canadian imports brought all the markets. At the end, the Dow Jones lost 1.6 %, while the S&P 500, the largest index of Wall Street – which nevertheless recorded an upward record two weeks ago – lost 1.4 %. The Nasdaq, which welcomes many companies in the tech sector, plunged almost 4 %. Even Bitcoin, the star value of Donald Trump, sank 4.5 %. The European market and the CAC 40 unscrewed by 2 %.
In the days that had followed his nomination, the American media had nevertheless recorded a “Trump Bump” of optimism on the markets, while the new president promised that the increase in customs would boost the profits of companies. But if the flexibility offered by the deregulation of Donald Trump was originally appreciated by the markets, it is ultimately the confusion that takes over in the face of the total unknown of the magnitude, the calendar and the targets of the next customs of customs rights, and which creates chaos among financial operators.
The fear of destabilization of the global economy
With customs duties never so high since the 1940s, investors feared a destabilization of the world economic order which would therefore cause a price increase, followed by a slowdown in growth in the United States, but also in China. Without counting, Recalls the Washington Post,, That the dismantling of certain parts of the federal government by Elon Musk again hovers the spectrum of a “Shutdown” (a judgment of government activities) on the American government.
Beijing’s reaction was not long in coming: Tuesday March 4, China announced to reply by an increase in taxes of 10 to 15 % on a series of agricultural products from the United States, while Ottawa promised customs duties of 25 % on certain American products, including meat, eggs, fruit and wine. Ontario, a Canadian province, announced in retaliation that it would immediately terminate its contract with Starlink, the Internet supplier founded by Elon Musk, but also that it would no longer sell American alcohol on its territory. Mexico should also announce countermeasures by Sunday.
European scholarships rebound in the hope of a compromise
In Europe, the scholarships were finally reopened this Wednesday, March 5 in the morning before the hope of a commercial compromise returned to customs duties between the United States, Canada and Mexico. Around 11:30 a.m., CAC 40 from Paris climbed 2.12 %, London by 0.61 %and Milan by 2.16 %. The Dax of Frankfurt flew by 3.57 % after a fall of the same order the day before. According to the US Secretary of Commerce Howard Lutnick, a decision could take place this Wednesday following an exchange with his counterparts.
The fact remains that among investors, steam is reversed very quickly. According to Les Echos,, The AAII barometer (the American Association of Individual Investors) indicates that if optimism dominated their mood at the end of January, the pessimists are now running 40 points ahead. Overall they therefore withdraw their profits, take their earnings and turn away from the investments deemed risky, to go take refuge in the armament, defense or even cybersecurity sector, rare titles that fly away on the stock market, notes the French daily newspaper. With Financial Timesthe manager of the asset allocation of Société Générale Alain Bokobza, judges that “a world trade war is a losing situation for everyone”, and that “some will lose relatively more than others, but everyone will be losing”.