Investor confidence in EU drops after Trump's Brussels trade deal
The latest snapshot from the Sentix index showed that investor sentiment fell significantly at the start of the month after the deal last week between Trump and the European Commission president, Ursula von der Leyen.
The data provider said its weekly survey of thousands of investors in more than 20 countries showed that the pact was a 'deal that dampens the mood', with Trump and the US viewed as 'winners' at the expense of the eurozone.
'The result is devastating for the eurozone,' said Manfred Hubner, the managing director of the Sentix economic index. 'The current situation and expectations are both declining. The wrinkles of concern in the economy are deepening again.'
Financial markets are braced for Washington to introduce sweeping, higher 'reciprocal' tariffs on imports from dozens of countries from the middle of this week, including Brazil on Wednesday and most other nations from Thursday.
Share prices in Switzerland, which is facing a 39% export tariff from Thursday, plunged on Monday, as nations around the world continue to grapple with the fallout from Trump's erratic global trade war.
Financial markets elsewhere rallied, including in London, Frankfurt, and Paris, after a tariff-related sell-off at the end of last week.
In tangled negotiations, with the threat of tariffs being withheld, escalated and rescinded on an almost daily basis, Washington remains locked in talks with several countries.
A tariff of 40% on US imports from Brazil will begin on Wednesday, and will be topped up to 50% from Thursday.
Canada is pushing for a deal to bring down tariffs of 35% on its exports, which was introduced from Friday, while US border taxes on imports from China and Mexico have been paused to allow more time for negotiations.
The latest snapshot from Sentix showed sharp declines in investor confidence in Germany and Switzerland in particular after the agreement reached between Trump and von der Leyen at the US president's Turnberry golf resort in Scotland.
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The headline index fell from 4.5 in July to -3.7 in August, according to the survey conducted between 31 July and 2 August.
The US-EU trade deal drew swift condemnation from some European leaders, including the French prime minister, François Bayrou, who called it a 'dark day' for the EU.
The agreement involves Washington imposing a 15% tariff on almost all European exports to the US, about triple the 4.8% tariff now in force. However, the pact limited a much higher – 30% – import duty threatened from Trump's self-imposed 1 August deadline.
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