Expert: Threatening Trade War Could Lead to "Serious Situation"

The stock exchange is fumbling in the dark ahead of the threat of punitive tariffs between the EU and the USA, says Robert Bergqvist, senior economist at SEB. In a trade war, there are no winners.

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Expert: Threatening Trade War Could Lead to "Serious Situation"
Photo: Jessica Gow/TT

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Donald Trump has announced that the USA will introduce penalty tariffs of 25 percent on products from the EU – which promises a "firm" response.

Bad news for Sweden, the EU, the USA, and the entire global economy, but in the constant stream of threats and statements from the American president, it's difficult to determine which statements will be put into action, believes Robert Bergqvist.

It will likely become tariffs, but regarding the percentage, industries, and goods, there is currently great uncertainty.

An uncertainty that is reinforced by the previously announced tariffs against Mexico and Canada, where the messages have shifted.

One should take the words seriously, but if one reacts to every ball he kicks, I think one is reacting incorrectly.

The stock market is also groping in the dark, says Bergqvist.

My impression is that the stock markets are currently trading somewhat aimlessly. The pessimist becomes worried about the statements, the optimist takes hold of the mixed signals from the White House regarding the tariffs against Mexico and Canada and sees it as a light in the tunnel.

If the tariffs become a reality, the EU and Sweden will have to respond with corresponding tariffs. In such a situation, there are only losers, according to the economist.

If we head in the direction of escalating threats where tariffs are determined eye for an eye, tooth for a tooth, then we have a serious situation. It's a matter of thinking before reacting too quickly.

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

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