Betashares’ chief economist has said markets are cautious after Trump’s geopolitical actions and tariff threats unsettled investors.
David Bassanese, Betashares chief economist, said global markets were monitoring United States President Donald Trump’s geopolitical actions and tariff threats as potential risks to economic stability.
One year into Trump’s term, he said the president had “started the year in fine form, with action in Venezuela, threats on Iran and Greenland and a criminal probe into the Federal Reserve.”
Trump had also reiterated tariff threats against any country trading with Iran or those in Europe that opposed America’s drive to acquire Greenland, Bassanese said.
“…so much for last year’s carefully crafted trade deals!” he commented.
Bassanese said Trump appeared intent on deploying tariff threats “on the slightest whim,” and markets were watching whether the US Supreme Court would allow continued broad use of tariffs.
On 17 January, Trump threatened a further 10 per cent tariff on goods (for a total of 25 per cent) on crucial NATO allies in response to their defiance on the proposed invasion of Greenland, including Denmark, Norway, Sweden, the UK, France, Germany, the Netherlands and Finland.
According to the US president, absorbing Greenland as a US territory is crucial to national security after unsubstantiated claims that Russia and China have a vested interest in the island.
Bassanese said markets appeared to be learning to live with these threats, taking them “with a grain of salt – and potentially just seeing them as ambit claims at the start of negotiations”.
On the specific threat towards European countries over Greenland, Bassanese said it could ultimately be counterproductive. He noted it was “highly unlikely any self-respecting European country would give up on Greenland in the face of tariff threats alone”.
Bassanese added that further large tariffs on major trading partners could heighten risks for the US economy, particularly if Europe retaliated with trade measures of its own.
He said if Trump was forced to back down without gaining Greenland, it might once again expose many of his threats as hollow and undermine future negotiations.
In a recent development on 20 January (AEST), outlets have revealed what some have called a “deranged” text message to Norwegian Prime Minister Jonas Gahr Store, once again threatening an invasion of the semi-autonomous Danish territory.
Bizarrely, Trump’s threat appears to be fuelled due to being snubbed for the Nobel Peace Prize, despite Trump (as he erroneously claims) having “stopped 8 Wars”.
“I no longer feel an obligation to think purely of Peace,” the US president proclaimed, “although it will always be predominant, but can now think about what is good and proper for the United States of America.”
Trump challenged Denmark’s claim to Greenland as “there are no written documents, it’s only that a boat landed there hundreds of years ago”, while, ironically, stating that “we had boats landing there, also”.
“I have done more for NATO than any other person since its founding, and now, NATO should do something for the United States,” Trump remarked. “The World is not secure unless we have Complete and Total Control of Greenland.”
“Thank you! President DJT.”
These threats have come amid repeated assertions of self-determination from Greenlandic and Danish authorities. An opinion poll released last year revealed that 85 per cent of Greenland citizens hold no desire whatsoever for their country to fall under the US regime.
