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US tariffs and deficit drama: stock market is reeling in uncertainty!
Current developments in the economy: US tariffs are putting a strain on markets, mergers in Switzerland and EU-US trade conflicts are shaping events.
US tariffs and deficit drama: stock market is reeling in uncertainty!
Investors worldwide are increasingly concerned about the financial stability of the United States. Above all, the prospect of rising government deficits is weighing on the stock markets. The markets had to accept some drastic setbacks this week. A $16 billion auction of U.S. Treasury bonds was disappointing, contributing to a further decline in the stock market. Interest rates and yields rose sharply, which further increased uncertainty among investors. Amid this turmoil, US President Donald Trump announced punitive tariffs of 50 percent on EU imports to take effect from June 1, which could have an even greater impact on markets. stgallen24.ch further reports that these tariffs are likely to lead to renewed tensions in the already tense trade relationship between the USA and the EU.
While financial markets are suffering under the pressure of tariff threats and uncertain US foreign policy, the situation in conflict areas such as Ukraine and Israel remains tense. In this context, investors are increasingly turning to more stable assets such as the Swiss franc and gold. In addition, despite market concerns, Bitcoin has reached a significant level of $110,000. stgallen24.ch highlights that uncertainty is also exacerbated by the ongoing trade conflicts between the US and the EU.
Trade conflicts between the USA and the EU
The discussion about trade relations between the USA and the EU continues to be characterized by dissatisfaction. Top representatives of the European economy express critical voices about the last meeting at the EU-USA summit in Washington. The summit did not bring any concrete solutions to the serious trade conflicts, which strengthens European business representatives in their call for a decisive negotiation course. sueddeutsche.de reports that US President Joe Biden and EU Commission President Ursula von der Leyen agreed to continue negotiations, although no concrete progress was announced.
The summit highlighted the need for trade facilitation, particularly for minerals needed to make vehicle batteries. Various business representatives expressed their disappointment at the unclear wording on the US special tariffs on steel and aluminum imports. There are fears that without tangible results in the next two months, tariffs on European exports from the US could come into force again. These developments have severely weakened confidence in trade relations between continents and could have a significant impact on the international economy.
Impact on the financial sector
The pressure of the current political and economic situation is also clearly noticeable in the financial sector. Companies and banks react to the uncertainties: Credit Suisse is struggling with challenges regarding management bonus cuts, while Fitch increased the outlook for UBS ratings from stable to positive due to the integration of CS into UBS. At the same time, Swisslife recorded a 5 percent increase in its gross premiums, while Julius Baer expects its half-year profit to decline. stgallen24.ch also reports on other companies such as Galenica, which recorded sales growth in the first four months of the year.
In this confusing situation, it remains to be seen how trade conflicts and fiscal uncertainty will impact markets and the global economy. A stable and reliable trading environment is crucial for investors to regain further confidence in the markets.