Is Trump's Tariff Policy Fueling Global Recession Fears?

CGTN Europe

CGTN Europe spoke to Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown

Transcript

00:00Susanna Streeter is Head of Money and Markets at Hargreaves Loungedown.

00:04Great to have you on the programme again, Susanna.

00:06So, are we at the bottom or is there worse to come?

00:10I think we're going to see continued volatility,

00:13but I think a lot is going to depend on what we hear from President Trump in the coming days.

00:19What you heard was when he said that this tariff policy was a medicine.

00:24That spread concerns about the bitter pill that the global economy is going to have to swallow

00:30and led to fresh worries about global growth and a potential looming global recession.

00:36And that's why you've seen these steep falls.

00:38Also, the very fact that actually markets in Asia,

00:41it's the first time that they've been able to respond as well to China's retaliation

00:45against Trump's tariffs that were imposed late on Wednesday.

00:51And so all of this is added up to this kind of real climate of fear and worry

00:56emanating right the way through stock markets.

00:59You mentioned that there are signs.

01:01Yes, I was just about going to say, if there are signs that President Trump does decide to roll back

01:06or at least a little bit on some of these tariffs,

01:09you might see some of the losses pared back.

01:12You could see a bit of a turnaround, but I think volatility is here to stay for the time being.

01:17Well, I think you kind of answered my next question then,

01:19because, as you mentioned, those Chinese markets have been shut on Friday

01:22when selling was the heaviest in the U.S. and other centers.

01:25And what you're saying is that what we're seeing on the Asian markets,

01:28it's not just playing catch up. These losses are a long term thing.

01:33Yes, you saw, for example, the Hang Seng fall by 13 percent.

01:38It's partly playing catch up, but also, I think, in response to Trump's latest comments

01:44where he appeared to double down on his tariff policy

01:48despite growing voices from some of his previous supporters

01:54who are saying, look, we don't think this is the right strategy at all.

01:58Bill Ackman there saying it could lead to an economic nuclear winter.

02:02So he's not mincing his words there.

02:04There still will be hope that Trump will listen and actually start negotiating

02:09and that some of these more onerous tariffs will be rolled back

02:12because the calculations upon which these decisions were made

02:17have been questioned as being highly dubious.

02:20It's based on surpluses, tiny countries being slammed with really painful tariffs

02:26as a result of sending some goods to the United States over one year.

02:33I mean, it doesn't make economic sense.

02:35And that has come through loud and clear from so many parts of the world.

02:39I think talking about Trump's math is probably a conversation,

02:42a much longer conversation for another time.

02:44But let's look at the impact on European markets.

02:47What is it going to take to calm things down?

02:50It's not just about Trump moving, is it?

02:53It's about the reaction and the retaliation.

02:56Yes, and actually what I think you have seen is some noises coming from Europe

03:01about the fact that they do not want to impose really steep tariffs.

03:07And so I think that's partly why you've seen some of the losses pep back today.

03:12So the DAX was initially down a lot more and it's gained back a tiny bit of ground

03:18amid hopes that you won't see a further escalation

03:21and that leaders will wait and see how all of this plays out.

03:27Because the danger is, for example, for the wine industry, for example,

03:32if extra tariffs are then put on U.S. goods,

03:36then Trump has vowed to retaliate and slam even further tariffs on the wine industry, for example.

03:42You've already seen the likes of luxury goods maker LVMH,

03:45obviously owns Moët, Hennessy.

03:47It shares down really sharply today.

03:49But there will be some hopes that there is room for negotiation.

03:53It's unnerving for investors and consumers alike.

03:55Susannah Streeter from Harwoods Lansdowne, always a pleasure to talk to you.

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