"Economist: 'It can get worse'"

The Stockholm stock exchange falls sharply after USA's tariff announcement. I think it can get worse. The market has not counted on Trump introducing tariffs of 25 percent on its largest neighboring countries, says Maria Landeborn, senior strategist at Danske Bank.

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"Economist: 'It can get worse'"
Photo: Lisa Arfwidson/SvD/TT

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The Stockholm stock exchange falls around two percent in morning trading, more than the larger European stock exchanges.

Since we have so much industry that is dependent on cross-border trade, says Esbjörn Lundevall, stock strategist at SEB.

The reason is of course the uncertainty following the tariffs that US President Donald Trump has announced.

The idea is that they will be introduced tomorrow and as always when it comes to Trump, the uncertainty is high. It's quite clear that this came as a surprise and the stock exchanges haven't taken it into account, says Landeborn.

"Uncertainty increases"

And it can get even worse, if Trump for example goes ahead with the tariff threats against the EU and/or the trade war escalates.

I think it can get worse. The market hasn't counted on Trump introducing tariffs of 25 percent on its largest neighboring countries. And now other countries are ready. This makes the uncertainty increase dramatically for companies regarding prices, demand, trade, and supply chains. This isn't something that will last for just a day if this continues, says Landeborn.

Negotiation game?

Esbjörn Lundevall is still surprised by the reaction – that there would be tariffs has been very clear from Donald Trump.

There is now great uncertainty about what will happen, how much is a negotiation tactic. But that there will be tariffs even against Europe is fairly clear, according to Lundevall.

That's how it's going to be, he says.

Is it still a negotiation game that Trump is playing?

In the case of Canada and Mexico, it's partly about negotiations. I think we should assume that there will be tariffs even going forward. But just this 25 percent level I would question based on it being partly a negotiation game, says Lundevall.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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