The US-Europe trade war escalates, and the global market trembles in the 'eye of the storm'

Amidst the numerous challenges already facing the global economy, the US and Europe, this pair of “old allies,” have staged a laughably absurd escalation of a trade war, plunging global markets into panic and chaos.

The Trump administration recently announced that starting February 1, 2026, a 10% tariff would be imposed on all goods exported to the United States from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. Even more shocking, starting June 1, this rate will be sharply increased to 25%. This decision was like a bombshell that instantly detonated on the international economic stage. The US move seems deliberately designed to place obstacles in the path of global economic recovery, completely disregarding the potential chain reactions it might trigger.

Naturally, Europe would not sit idly by and quickly launched a strong rebuttal. EU leaders stepped forward to express their opposition, a stance reminiscent of warriors angered by an unprovoked provocation. The EU swiftly began discussing countermeasures, including imposing tariffs on US goods worth €93 billion ($108 billion). Furthermore, they seriously considered other measures such as restricting American companies from entering the EU market. The scene is like two children arguing—one strikes first, and the other immediately threatens to hit back, promising to be even more aggressive.

The escalation of this trade war has instantly plunged global markets into worry. Investors, like startled birds, have seen expectations for global economic growth slow sharply. The already fragile global economic recovery process has now been further aggravated. Market risk aversion has surged rapidly, with funds flocking to safe-haven assets like gold, like a herd of frightened sheep. Gold prices have soared, seemingly mocking this pointless trade dispute. Meanwhile, the stock markets have faced a 'black storm' — U.S. stocks closed sharply lower, with the Dow, Nasdaq, and S&P 500 all falling, and tech stocks leading the decline. Shares of tech giants like Nvidia, Tesla, and Apple plunged sharply, as if shaken by the storm of this trade war. European stock markets have not been spared either, with the Stoxx Europe 600 index closing lower amid widespread market distress.

In this trade war, both the U.S. and Europe seem trapped in a 'zero-sum game' mindset. The U.S. government may believe that imposing tariffs can protect domestic industries and promote employment, yet it overlooks the damage such measures cause to global industrial and supply chains. Europe's countermeasures may appear tough but also result in mutual losses. Both sides are trying to force concessions through pressure, without realizing that such actions ultimately harm the overall interests of the global economy.

Even more ironically, the U.S. and Europe have long prided themselves as advocates and defenders of free trade, yet in this trade war, they are playing the role of destroyers. They raise the banner of protecting national interests while disregarding global economic stability and development. This behavior is like two guests at a grand banquet fighting over a cake; in the end, not only is the cake smashed to pieces, but the entire banquet is thrown into chaos.

In this 'farce' of the U.S.-Europe trade war, the global market has become an innocent victim. Investors can only watch helplessly as their wealth shrinks, while businesses face rising raw material costs and declining market demand. The U.S. and Europe may achieve a short-term 'victory' in this struggle, but in the long run, they will lose the trust and cooperation of the global market. Hopefully, both sides will wake up soon, abandon such short-sighted behavior, and resolve differences through dialogue and negotiation, allowing the global economy to return to a path of stable development. Otherwise, this 'farce' will continue to play out, and ultimately, all of humanity will suffer.