U.S. President Donald Trump’s moves to slap tariffs on some of the country’s most important trading partners have rattled financial markets, and many are now fretting about the potential threat to what is now mostly synchronized world growth.
Stocks rose and bond yields fell on Friday as investors welcomed an apparent end to a political crisis in Italy but prospects for a full-blown trade war put a dampener on gains.
“The uncertainty about future trade and Trump’s contempt for international rules can deal a significant blow to business confidence especially in trade-oriented nations,” said Holger Schmieding, chief economist at Berenberg.
That danger was made all the more real on Thursday when the United States and its key allies announced tit-for-tat tariffs.
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