Tag: Tariff War

Posted on

Why Are Markets Still Rising Despite Ongoing Bad World News?

Stock market tug-o-war

Stock markets are continuing to climb despite a growing list of concerns that would normally be expected to unsettle investors.

Interest rates are higher, government bond yields have risen, oil prices are elevated and inflation remains a concern. Geopolitical tensions are also creating uncertainty. Tariffs still on the agenda. Global debt rising and rogue AI concerns.

Yet investors continue to buy shares, particularly in the United States.

So why?

One important reason is corporate earnings. Investors appear willing to tolerate higher interest rates and expensive valuations while they believe company profits will continue to grow.

Large technology companies, in particular, remain at the centre of this optimism, with huge investment in artificial intelligence fuelling expectations of strong future earnings.

Buying dips

Another factor is the willingness of investors to buy market dips. When share prices fall, investors who remain confident about the longer-term outlook see an opportunity to buy at cheaper prices.

This can create a self-reinforcing cycle: markets fall, buyers move in, confidence returns and prices rise again.

There is also a belief that the economy remains sufficiently resilient to withstand higher borrowing costs and expensive energy.

Bad news is therefore being viewed as a problem, but not necessarily one capable of seriously damaging corporate profits.

However, this resilience could eventually be tested.

Earnings faith

The market is currently placing considerable faith in continued earnings growth and the economic benefits of artificial intelligence. If either begins to disappoint, investors could reassess the high valuations attached to many shares.

Higher oil prices could also keep inflation elevated, forcing interest rates to remain higher for longer. Rising bond yields would then provide investors with an increasingly attractive alternative to shares.

Bull Bear

For now, the bulls remain in control of market prices, even though the bears have plenty of arguments on their side.

The important question is whether company profits can continue to justify today’s share prices.

If they can, markets may continue climbing despite the bad news. If they cannot, investors may suddenly start paying much closer attention to all those warning signs they have recently been ignoring.

Posted on

U.S.–Canada Tariff War: The Trade Fight Escalates

Trumps Tariffs

The United States and Canada have entered a new and potentially damaging phase of their long-running trade dispute, with both neighbours now imposing steep tariffs on each other’s goods.

Escalation

The latest escalation came after trade negotiations broke down. From 22nd August 2026, the United States imposed 50% tariffs on around $27.6 billion (£20.5bn) of Canadian goods, targeting products covered by new Section 338 measures.

The duties include major categories of Canadian exports, with steel, aluminium, vehicles, auto parts and other manufactured goods among those affected.

U.S. action

Washington argues that the measures are necessary to counter what it regards as discriminatory Canadian trade policies, particularly involving dairy, motor vehicles and U.S. alcoholic drinks.

The White House has also threatened further action, including a planned 50% tariff on Canadian cars and trucks from January 2027, adding another major risk for the integrated North American automotive industry.

Canada responds

Canada has now responded in kind. From 8th September 2026, Ottawa will impose retaliatory tariffs of 15%, 25% and 50% on approximately $27.6 billion of US imports, matching the American duties product for product.

The targeted goods include steel and aluminium, furniture, clothing, appliances, dairy products, fish and seafood, agricultural equipment, pulp and paper and electronics.

Significant

The significance of this confrontation extends far beyond the value of the tariffs themselves. The U.S. and Canada have one of the world’s largest trading relationships, with hundreds of billions of dollars in goods crossing their shared border every year.

Tariffs ultimately act like a tax on trade. Importers face higher costs, which can feed through to manufacturers, retailers and eventually consumers.

Trust?

Companies that have spent decades building highly integrated North American supply chains could also face disruption.

What began as a dispute over market access and trade policy is therefore becoming a much broader economic confrontation.

The big question now is whether Washington and Ottawa can return to negotiations before the tariff battle starts inflicting lasting damage on both economies.

Posted on

A Trump Tariff Tantrum and the Greenland Gambit: Europe Braces for more Trump Turmoil

Tariff Turmoil

Donald Trump’s latest tariff broadside has sent a fresh tremor through Brussels, rattling diplomats who were already juggling NATO tensions and the lingering aftershocks of previous trade disputes.

This time, the spark is an unexpected one: Greenland

The controversy began when Trump revived his long‑standing frustration over what he describes as Europe’s ‘unfair’ economic advantage.

According to commentators, his renewed push for steep tariffs on EU goods is tied to a broader strategic grievance — namely, Europe’s refusal to support his administration’s interest in expanding U.S. influence in the Arctic, particularly around Greenland.

While the idea of purchasing the island was dismissed years ago, the geopolitical value of the Arctic has only grown, and Trump’s circle continues to frame Greenland as a missed opportunity that Europe ‘blocked’.

The EU, blindsided by the sudden escalation, now finds itself scrambling to interpret the move.

NATO tariff leverage

Analysts argue that the tariffs are less about economics and more about leverage within NATO.

Trump has repeatedly insisted that European members must increase defence spending, and some observers see the Greenland dispute as a symbolic pressure point — a reminder that the US expects alignment on strategic priorities, not just budget commitments.

Bullying?

European leaders, meanwhile, are attempting to project calm. Publicly, they describe the tariffs as disproportionate and counterproductive. Privately, officials admit that the timing is deeply inconvenient.

With several member states already facing domestic economic pressures, a transatlantic trade clash is the last thing they need.

Yet the EU is also wary of appearing weak. Retaliatory measures are reportedly being drafted, though diplomats insist they hope to avoid a spiral.

The fear is that a tariff war could fracture cooperation at a moment when NATO unity is already under strain.

For now, Europe waits — bracing for the next twist in a saga where Greenland, of all places, has become the unlikely fault line in transatlantic politics.