Trump's Remarks Stir Global Reactions, Impact Stock Markets
Trump’s Remarks Stir Global Reactions, Impact Stock Markets
US President-elect Donald Trump indicated on Tuesday that he is open to considering military or economic measures to pursue the acquisition of the Panama Canal and Greenland, aligning with his broader expansionist vision since his victory on November 5. As he prepares to take office on January 20, Trump also suggested the possibility of making Canada a US state, called for increased defense spending from NATO allies and proposed renaming the Gulf of Mexico to the Gulf of America.
In response, Canada’s Foreign Affairs Minister, Melanie Joly, expressed on X that Trump’s remarks reflect a misunderstanding of Canada’s strength. She emphasized, “Our economy is robust. Our people are resilient. We will not yield to threats.” When asked if he could guarantee that he wouldn’t resort to military or economic pressure in his pursuit of the Panama Canal and Greenland, Trump replied, “No, I can’t assure you on either of those two. But I can say this: we need them for economic security.” He hinted at imposing tariffs on Denmark if it declines his offer to buy Greenland, despite Denmark’s stance that Greenland, a self-governing territory, is not for sale.
Responding to Trump’s comments, France’s foreign minister stated on Wednesday that the EU would not permit any nation to attack its sovereign borders. “There is no question that the European Union would allow any country to assault its sovereign borders, regardless of who they are,” he remarked on France Inter radio. Trump also proposed that NATO members allocate 5% of their GDP to defense, a notable increase from the current 2% target. NATO estimates that by 2024, 23 of its 32 members will meet the 2% spending goal.
A team led by CIC Market Solutions economist Adrien Regnier-Laurent noted, “At this stage, his statements raise questions and create uncertainty about the trade and foreign policy he intends to implement the day after his inauguration on January 20.”
Impact on markets
Shares in companies involved in wind energy, such as Orsted, Siemens Energy, and Vestas Wind Systems, dropped by over 4% on Wednesday following Trump’s announcement that he would not allow any new wind farms during his second term.
On the other hand, defense contractors saw their stock prices rise after Trump urged NATO allies to allocate 5% of their GDP to defense spending, which is more than double the current goal. Shares of Norwegian missile manufacturer Kongsberg Gruppen increased by as much as 4.1%, Sweden’s Saab climbed 5%, and Germany’s Rheinmetall rose by 5.3%.
These fluctuations provide an early glimpse into market volatility investors might face during Trump’s presidency. His remarks have even influenced stocks in distant markets like Australia, where small-cap miner Energy Transition Minerals, a rare earth project in Greenland, skyrocketed by 52% after Trump renewed interest in acquiring the island.
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