Business

Trump’s Tariff Threats Loom Over Europe’s 2025 Growth, Wall Street Warns

Published

1 month ago

February 5, 2025

RTX

Europe’s economic recovery could be at risk in 2025 as top Wall Street analysts warn that potential tariffs from former U.S. President Donald Trump’s administration may derail growth. Experts from Goldman Sachs and JPMorgan suggest that the eurozone’s GDP could slow to 0.7%, well below the 1.1% forecast by the European Central Bank (ECB) in December.

Trade Uncertainty Weighs on Markets

With Trump’s potential return to the White House, analysts fear that renewed trade disputes between Washington and Brussels could pressure Europe’s fragile recovery. While the EU was not included in the first wave of U.S. tariffs—which affected Mexico, Canada, and China—Trump has hinted that the bloc could be next due to its large trade surplus with the U.S.

Goldman Sachs’ chief European economist Sven Jari Stehn estimates that a 10% tariff on all U.S. imports from the EU—if fully reciprocated—could erase one percentage point from euro area growth.

Beyond GDP, corporate earnings are also at risk. Goldman Sachs projects European earnings per share (EPS) growth of just 3% in 2025, far below the 8% market consensus. Analysts stress that the primary concern is not just the tariffs but the uncertainty they create, which could stifle investment and business confidence.

Sectors Most at Risk

The EU accounts for 15% of total U.S. imports, with key industries such as machinery, pharmaceuticals, chemicals, and automobiles particularly exposed. Analysts warn that car manufacturers and cyclical industries—which rely on global supply chains—face the highest risk of disruption.

However, healthcare and high-margin defensive sectors may fare better. The so-called “GRANOLAS” stocks—which include GSK, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP, and Sanofi—have underperformed recently but historically perform well when trade tensions rise.

Can a Weaker Euro Offset the Impact?

A declining euro could provide some relief to European exporters, particularly multinational firms with significant U.S. revenue exposure. Goldman Sachs predicts the EUR/USD exchange rate will fall to 0.97 within 12 months, with GBP/USD weakening to 1.20.

However, analysts caution that a weak euro does not guarantee stock market gains. A stronger U.S. dollar has historically led to underperformance in non-U.S. markets, as dollar-based investors face currency translation losses unless hedged.

“Euro weakening usually coincides with rising risk premiums, offsetting any competitiveness advantages,” Goldman Sachs strategists noted.

EU Retaliation Strategy Unclear

Europe’s response to potential U.S. tariffs remains uncertain. According to JPMorgan economist Nora Szentivanyi, the EU Commission has vowed to retaliate firmly, but the specific timing and scope of its response remain unclear.

If Brussels follows its 2018 trade war playbook, it may impose steep tariffs—possibly over 50%—on politically sensitive U.S. exports, targeting sectors that could hurt Trump’s voter base the most.

JPMorgan estimates that trade policy uncertainty has already cut 0.5 percentage points from Europe’s annualized growth over the past year. Any new tariff threats could further weaken the region’s economic outlook.

US-EU Trade Talks Underway

Amid growing concerns, U.S. Treasury Secretary Scott Bessent met with ECB President Christine Lagarde on Tuesday to discuss transatlantic trade policies. While no official details were disclosed, the meeting signals that Washington and Brussels are closely monitoring rising trade tensions.

As financial markets await clarity on U.S. trade policy, analysts warn that investors and businesses must brace for a turbulent 2025.

Business

Global Markets React to Trade Tensions as Investors Weigh Trump’s Tariff Moves

Published

15 hours ago

March 11, 2025

RTX

Global stock markets remained volatile on Tuesday as investors responded to escalating trade tensions and economic uncertainty following recent remarks by US President Donald Trump. Concerns over potential tariffs and economic slowdown have sent Asian, European, and US markets into a downturn, with tech stocks and major indices experiencing sharp losses.

European Markets Open Mixed Amid Tariff Concerns

European markets opened with mixed performances on Tuesday, as investors assessed the potential impact of Trump’s tariff policies on global trade and company earnings.

FTSE 100 (UK) dipped 0.10% in early trading.
DAX (Germany) rose 0.6%, while CAC 40 (France) gained 0.4%.
The pan-European STOXX 600 fell 0.2%, reflecting broader market unease.

Market analysts suggest that Trump’s comments about a “period of transition” have raised fears of an economic slowdown, leading investors to adjust their expectations and pricing strategies.

“Trump’s willingness to endure short-term economic pain for long-term structural gains is being priced into the markets. Investors can no longer assume his policies will always favor stock market performance,” said Kyle Chapman, an FX analyst at Ballinger Group.

Asian Markets See Extended Sell-Off

Asian markets followed Wall Street’s lead, with stock indices experiencing losses overnight amid growing fears of a prolonged US-China trade war.

Nikkei 225 (Japan) dropped 0.6% to its lowest level in six months, though it recovered from an earlier 2% decline.
Shanghai Composite (China) rose 0.4%, buoyed by government measures aimed at stabilizing the slowing economy.
Hang Seng (Hong Kong) remained flat at 23,782.14.
S&P/ASX 200 (Australia) declined 0.9%, while Kospi (South Korea) fell 1.2%.

According to IG analysts, the global market sell-off is being exacerbated by recession fears linked to Trump’s tariff rhetoric.

Wall Street Suffers Steep Decline

The US markets closed sharply lower on Monday, with tech stocks leading the downturn.

Nasdaq Composite plummeted 4%, marking its biggest single-day loss since 2022 and wiping out $1.1 trillion (€710 billion) in market value.
S&P 500 declined 2.7%.
Dow Jones Industrial Average fell 2.1%.

Goldman Sachs also cut its US growth forecast for 2025, revising expectations from 2.4% to 1.7%, adding to investor concerns.

The “Magnificent Seven” tech stocks—including Apple, Microsoft, and Tesla—were among the hardest hit, as analysts warned that higher tariffs could erode profit margins and slow earnings growth.

“Markets are now facing weaker earnings prospects, alongside the added cost burden created by tariffs,” said Kyle Rodd, a senior analyst at Compital.com Australia.

Commodities and Currency Markets React

Oil Prices:
- US crude oil rose 0.42% to $66.31 per barrel.
- Brent crude climbed 0.3% to $69.50 per barrel.
Gold Prices:
- Gold increased 0.5% to $2,900.4 (€2,661.6) per ounce, hovering near record highs.
Currency Markets:
- EUR/USD pair rose 0.6%.
- EUR/GBP edged up 0.2%.

Corporate Earnings Updates

Volkswagen shares gained 1.6% on Tuesday morning after the company released its full-year 2024 earnings, despite reporting a 15% drop in annual profits. The German automaker remains optimistic about revenue growth in 2025.

Other major earnings reports expected today include Lego, Persimmon, and Leonardo.

Outlook: Volatility Expected to Continue

With global trade uncertainty, inflation concerns, and weaker growth forecasts, analysts anticipate that market volatility will persist in the coming weeks. Investors will closely watch further developments in US trade policy, corporate earnings reports, and central bank moves for clues on economic stability.

Business

BBVA to Launch Crypto Trading for Customers in Spain

Published

2 days ago

March 10, 2025

RTX

Spanish banking giant Banco Bilbao Vizcaya Argentaria (BBVA) is set to introduce cryptocurrency trading services in Spain, allowing customers to buy, sell, and manage Bitcoin and Ether transactions directly through the bank’s mobile app.

The move follows BBVA’s approval from the Spanish Securities and Exchange Commission (CNMV) under the European Markets in Cryptoassets Regulation (MiCA), which requires banks to secure regulatory clearance before offering crypto-related services.

Gradual Rollout of Crypto Trading

BBVA announced that the service will first be introduced to a small group of users before gradually expanding to all private banking customers in Spain over the next few months.

“Customers in Spain will be able to manage their crypto trading orders within the app, alongside their accounts, investments, and regular banking activities,” the bank said in a statement.

This development places BBVA among the frontrunners in Europe’s crypto banking sector, alongside Germany’s Deutsche Bank and France’s Société Générale, both of which have taken steps to integrate digital assets into traditional banking services.

BBVA’s Global Crypto Expansion

BBVA has already been operating crypto trading services in Switzerland since 2021 and Türkiye since 2023, where regulatory frameworks were established before MiCA became fully effective in December 2024.

Unlike some financial institutions that rely on third-party custodians, BBVA emphasized that it will use its own cryptographic key custody platform to safeguard customers’ assets.

“BBVA will maintain full control over safeguarding its customers’ crypto assets without relying on external providers,” the bank stated, reinforcing its commitment to security and regulatory compliance.

A Growing Trend Among Banks

The introduction of crypto services by traditional financial institutions reflects the growing mainstream adoption of digital currencies, particularly as regulatory frameworks in Europe and the U.S. evolve.

While BBVA’s crypto trading service will be available upon customer request, the bank clarified that it will not provide advisory services on crypto investments.

With this move, BBVA strengthens its position in Europe’s digital asset sector, potentially setting the stage for other banks to follow suit as cryptocurrency adoption continues to expand.

Business

China Imposes Retaliatory Tariffs on Canadian Goods Amid Escalating Trade War

Published

2 days ago

March 10, 2025

RTX

China has announced retaliatory tariffs on Canadian agricultural and seafood products, intensifying trade tensions between the two nations. The move, revealed on Saturday, comes in response to Canada’s tariffs on Chinese electric vehicles and metals imposed in October last year.

Beijing will enforce 100% tariffs on rapeseed oil, oil cakes, and peas, along with a 25% import levy on pork and aquatic products from March 20, further straining economic ties between the two countries.

Tit-for-Tat Tariffs Escalate Trade Conflict

The trade dispute between China and Canada has been growing since October 2023, when Ottawa imposed a 100% tariff on Chinese electric vehicles and 25% levies on Chinese steel and aluminum.

China’s Ministry of Commerce condemned Canada’s measures as violations of World Trade Organization (WTO) rules, calling them “acts of protectionism” that restrict Chinese exports and damage the country’s legitimate trade interests.

Impact on Canadian Exports

Canada’s rapeseed (canola) industry is expected to be heavily impacted by the new tariffs. In 2023, the crop generated C$13.6 billion (€8.73 billion) in sales, while Canadian canola meal and oil exports to China were valued at C$920.9 million (€591.3 million) and C$21 million (€13.5 million) respectively in 2024.

Additionally, Canada’s pea exports to China reached C$303 million (€194.5 million) last year. The new tariffs could severely disrupt trade flows, affecting Canadian farmers and exporters who rely on the Chinese market.

The Canadian Global Affairs Ministry denounced China’s tariff announcement as “unjustified”, stating that Canada rejects China’s findings and remains open to dialogue. The ministry accused China of unfair market practices, saying that its policies artificially lower production costs and distort global markets.

Wider Global Trade War Intensifies

China’s latest trade action follows a string of tariff hikes introduced by former US President Donald Trump last week, which included 25% duties on Canadian and Mexican imports and a doubling of tariffs on Chinese goods to 20%.

Shortly after, Trump granted a one-month exemption on auto and agricultural tariffs for Canada and Mexico under the USMCA agreement, as both countries signaled a willingness to reassess tariffs on Chinese imports.

China’s Economic Struggles Deepen

The trade war escalation comes amid economic uncertainty in China, with consumer prices falling 0.7% year-over-year in February, marking the first negative inflation rate in 13 months.

At its annual government meeting last week, Beijing set its 2025 GDP growth target at 5% and unveiled a trillions-of-yuan stimulus package to boost economic activity. However, analysts warn that sluggish domestic demand and mounting trade tensions could make achieving this target difficult.

To support economic recovery, China has pledged a “proactive fiscal policy and moderately loose monetary policy”, increasing its budget deficit to 4% of GDP—the highest in three decades.

Market Reaction and Currency Decline

Financial markets reacted negatively to the ongoing trade tensions. On Monday, the Chinese Yuan fell 0.22% against the US dollar, while Hong Kong’s Hang Seng Index slipped 1.7% in early trading.

Despite the recent downturn, Chinese markets have been rallying this year, partly fueled by the January launch of DeepSeek’s AI model, a Chinese tech startup competing with US AI firms.

As global trade disputes intensify, China and Canada remain locked in a growing economic standoff with potential long-term impacts on international commerce and investment flows.