Economy

Putin after the tariffs: Trump will "restore order"

Russian President Vladimir Putin says that US President Donald Trump will "restore order" in Europe during his second term, writes CNBC.

- And they will all stand at the feet of the master and wag their tails a little. Everything is falling into place, he said on Russian state television on Sunday without elaborating on what he was referring to.

On Monday, Kremlin spokesman Dmitry Peskov said that Russia is following developments after Donald Trump's decision to impose trade tariffs on Mexico, Canada and China.

Declines soften after tariffs on Mexico postponed

Wall Street starts the week sharply lower. At 4:40 p.m., however, the declines have eased after the news that the United States is postponing the introduction of tariffs against Mexico by about a month.

• S&P500: −0.9%
• Nasdaq: −1.3%
• Dow Jones: –0.4%

Trump's announcement is now seen by analysts as a sign that a trade war has begun.

"Although the direct effect on US growth from the tariffs is still quite modest, there is a risk that these policy shifts will strengthen concerns about future trade policy risks and potential countermeasures," writes Goldman Sachs analyst Dominic Wilson, according to CNBC.

The news channel lists several sectors that are hit hard on the stock market. Some examples are car-related, clothing companies, steel manufacturers, railway companies, housing developers and solar energy companies.

The tariff-sensitive automotive giants Ford and GM go from minus 3–6 percent to instead trading around minus 1 percent.

Tesla, however, continues to be sluggish. Despite softening declines, the stock fell almost 5 percent.

The food chain Chipotle and clothing companies Nike and Lululemon are also among Monday's tariff victims. The shares are recovering slightly but are still down 1-3 percent.

"Brutal tariffs just a taste - now the trade war begins"

Less than two weeks after Donald Trump made a comeback in the White House, he has already imposed tariffs on three of the United States' largest trading partners. The new tariffs, 25 percent on Mexico and Canada and 10 percent on China, are more brutal than any he has ever imposed before, writes The Economist.

Compared to Trump's last term, the newly announced tariffs cover goods worth around $900 billion, more than twice as much as last time.

The question is how much worse it will get, writes the newspaper, noting that what we saw this weekend is probably just a taste.

The Wall Street Journal's editorial board also sharply criticized the tariffs in a text with the headline "the stupidest consequences of the trade war begin".

The editorial board writes that the US economy is strong and that the tariffs may not push the country into recession. But the same cannot be said for its neighbors Mexico and Canada, where growth is more inhibited.

"This will make both friends and foes reassess their dependence on the US market, with consequences that are difficult to predict."

Broad drop after Trump's tariffs – SSAB against the current

The Stockholm Stock Exchange begins the week with a blood red opening. At 12:00, the indices are moving:

• OMXSPI: −1.9%
• OMXS30: −1.8%

The stock exchange is falling sharply in the wake of Donald Trump's announced tariffs against Mexico, Canada and China. Futures 

The stock market is falling sharply in the wake of Donald Trump's announced tariffs on Mexico, Canada and China. Futures are also pointing sharply down in the US.

"After just 14 days with President Trump back in the White House, my head feels like a tumble dryer," SEB writes in its morning letter.

There are mostly declines on OMXS30, where Electrolux and Sinch are found at the bottom and fall more than four percent each.

Volvo Cars follows its European sector colleagues down and loses 7 percent.

SSAB goes against the grain and rises 4 percent after a buy stamp from Jefferies. Swedbank falls 1 percent after a sell stamp from Barclays.

At 1:30 PM, Small cap-listed Bulten will open its books. The share falls 5 percent ahead of the report.

Analysis: Fifth Estate Could Make Trump Back Down

Donald Trump showed this weekend that he is serious and now it is only a matter of time before he moves forward with punitive tariffs against Europe, argues Dagens Industri's Emanuel Sidea.

"The US trade war now risks causing enormous disruptions in global supply chains, with major economic consequences," he writes.

But more important than retaliatory measures and diplomacy is the stock market's confidence in the president, writes Dagens Nyheter's Carl Johan von Seth. A decline on Wall Street would put real pressure on Trump.

"In his new USA, the financial markets are the fifth estate," writes von Seth.

For the Swedish industrial giants, a crucial question is which products will be considered so important that they are exempt from tariffs, according to Martin Blomgren at EFN.

"For many individual companies, it is the exemptions [...] that determine how big an impact a trade war will ultimately have," he writes.

At the same time, the increased anxiety is likely to put pressure on the krona, which would mitigate the effect of the punitive tariffs, writes SvD Näringslivs Johan Carlström.

“It would be a small consolation, but a weaker krona can therefore act as a shock absorber to some extent”.

Interest in Greenland's mines increases after Trump's purchase demand

After US President Donald Trump demanded to buy Greenland, interest in the island's mining companies has increased sharply, writes the Financial Times.

One reason is that China, a giant in the production of rare earth metals, reduced its exports significantly last year. Therefore, many players are now desperately trying to secure their access to the substances that are important in a wide range of industries.

However, the interest in the Greenlandic mining companies comes with a high price tag. The climate is demanding and infrastructure is lacking, which makes some hesitate – including the giant Rio Tinto.

Alexander Downer, a former Australian foreign minister and advisor to zinc company Skylark, says it was difficult to get investments in Greenland to go through.

“But if the US takes control, it could be easier,” he tells the FT.