President Trump's 30% trade tariffs pose challenges but are manageable for companies, says economist Frida Bratt. Despite potential impacts on export-dependent sectors like manufacturing, the market remains optimistic, interpreting the situation as less severe than initially feared.
Stock Market Expert on Tariff Threat: It Could Have Been Worse
Stock Market Expert on Tariff Threat: It Could Have Been Worse
President Donald Trump's 30% trade tariffs are not ideal, but they are manageable for companies. This is according to financial economist Frida Bratt, who does not believe that the stock markets will be significantly affected by Trump's new tariff announcement against the EU.
"If the stock market's logic holds, the market could interpret this as 'it could have been worse – it could have been the 50% he initially threatened,'" says Frida Bratt, financial economist at Nordnet.
Among the many export-dependent companies on the Stockholm Stock Exchange, it is particularly the manufacturing companies—a leading sector on the exchange—that will be affected by the tariffs.
"There is certainly a vulnerability there, but there is also a certain height on the stock markets since they have performed well despite these threats hanging over us all spring," says Frida Bratt.
So how likely is it that the tariffs will land at 30%?
"That is the question the market has been asking all spring and has concluded that it will not be so bad. The hope is that the final word has not been said and that companies can pass on the increased costs to the consumer," says Frida Bratt.
"However, this is easier said than done in a recession where consumers are already holding tightly to their wallets."