President Donald J. Trump meets with the President of the European Commission Ursula von der Leyen during the 50th Annual World Economic Forum. Image source: Shealah Craighead, Official White House Photo
The gathering of the world’s political and economic elite of leaders at Davos in Switzerland is currently going on with full steam.
They are discussing pressing issues concerning hot topics such as global trade relationships, the possibility of a new recession and matters of environmental preservation.
Undoubtedly the highlight of the week-long meeting was Donald Trump and his comments on the above topics.
Arguably, the centrepiece of his statements at Davos was his subtle threat towards the European Union in which he hinted at a potential escalation of the trade disagreements between the US and the bloc.
These comments come shortly after the signing of the Phase One trade agreement between the US and China, which many market analysts quickly judged to be the first step towards de-escalation of the ongoing impasse in the negotiations between the two countries.
Trump criticised the EU’s trade policies and practices, which some perceived as a well-measured threat against America’s European allies.
“They have trade barriers where you can’t trade, they have tariffs all over the place, they make it impossible. They are frankly more difficult to do business with than China.”
His comments, however, could also be an attempt to leverage his position at home in light of the ongoing impeachment inquiry and thus prove to be nothing more than a short-term lashing out.
He is known to take shots at the international stage in order to shift the focus away from his troubles on the American stage.
Ultimately, Trump expressed his hopes that a favourable trade deal between the two sides would be signed as soon as possible.
However, he attempted to pressure the European leaders by giving them a loose deadline to come to terms with his proposition before November’s presidential elections.
Meanwhile, European stocks were hit during today’s trading session, as the Euronext 100 fell slightly against the S&P 500 and the Dow Jones Industrial Average.
The European stock market is still vulnerable to international shocks as the German and French economies are highly dependent on the uninterrupted and free trade on the international supply network.
Thus, even minor hints at a potential deterioration of the international trade arrangements, such as Trump’s remarks at Davos, could influence the European stock market.
N100 vs the SPX and DJI. Image source: Trendsharks ©, created with TradingView.com
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