Bank executives urged calm on Tuesday as stocks tumbled after President Donald Trump’s threat of new tariffs.
pan-European Stoxx 600 was down around 1.2% in early morning trade on Tuesday – with most of the continent’s major bourses and sectors selling off heavily – after Trump imposed a potential 200% tariff French wine and champagne.
in the US, stock futures also retreated. The Dow Jones Industrial Average decreased by almost 1.5% S&P 500 decreased by 1.6% Nasdaq was observed almost 2% lower last time, and earlier, Markets in Asia also closed in negative territory.
Stoxx 600 Europe.
Fearing a repeat of the “Liberty Day” tariffs on the sidelines of the World Economic Forum in Davos last April, bank chiefs in Europe have urged caution over the possibility of a renewed trade war.
“It’s important to be calm” Commerzbank CEO Bettina Orlopp told CNBC’s “Squawk Box Europe” on Tuesday. “If we’ve been told anything from last year’s (tariff) incident, it’s to stay calm and see what’s really going on.”
The Stoxx 600 banks index fell 1.4% on Tuesday, while financial services fell about 1.3%, with European banks among the hardest hit in Tuesday’s pullback.
This came after markets were still reeling from the President’s plan to hit European countries tariffs 10% from February 1, rising to 25% from June 1 if they continue to resist his offer. plus Greenland.
“The New Normal”
Anthony Gutman, CEO Goldman Sachs International“This is the new normal,” he said, adding that the current noise is creating volatility for investors.
Speaking to CNBC’s “Squawk Box Europe” in Davos, Gutman said that while the bank is optimistic about Europe this year, the risk of tariffs “creates complexity for our clients who are business leaders and have to make business decisions.”
Stephen Van Ryswijk, CEO ING GroupEuropean markets said they weathered last year’s “Liberty Day” tariff shock, but The growing use of trade policy as a geopolitical weapon provided a “wake-up call” for the continent.
He said the current back-and-forth rhetoric over tariffs and territory could have lasting effects on the global economy.
Stoxx 600 Banks.
“Obviously geopolitics, trade disputes, supply chain challenges are not good for the stability of the economy,” Van Ryswijk told CNBC’s “Europe Early Edition” in Davos.
“Ultimately, stability and long-term policies are good for economies and societies and for banks.”
He added: “The question is, what will the side effect be? Will we see organizations changing their trading models or manufacturing elsewhere?
“Are we seeing investment stalling?” The side effects of the import tariff are more of a concern than the direct impact of the import tariff.”