Geopolitical tensions and US tariffs are increasing risk aversion, while European defense stocks are gaining prominence in the markets.
The rise of geopolitical tensions It put renewed pressure on global financial markets this week, reigniting the risk aversion between investors.
The movement gained momentum after the President of the United States, Donald Trumpannounce new US tariffs against European countries, in a context of strategic disputes involving Greenland.
The event takes place in January, with its political epicenter in Washington and immediate repercussions on European stock markets, exchange rates, and other sectors. US-EU trade relations.
The tariff threat reignites a scenario already familiar to the markets: increased volatility, a search for assets considered safer, and a repricing of sectors sensitive to political risk.
Still, analysts believe that this time the impact may be more selective, favoring specific segments, such as… European defense actions.
According to the announcement, the United States intends to impose additional tariffs of 10% starting February 1st on products from eight European countries:
Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the United Kingdom. If no agreement is reached, tariffs could rise to 25% on June 1st.
The measure was presented as part of a diplomatic pressure strategy related to Greenland.
In response, the eight countries released a joint statement of support for the territory, while authorities from European Union They signaled retaliation if… US tariffs may come to fruition.
This new chapter increases the uncertainties in US-EU trade relationsThis occurred precisely at a time when Europe was seeking greater predictability in international trade.
Risk aversion returns, but the impact may be more contained.
According to Berenberg’s chief economist, Holger Schmieding, the current scenario is reminiscent of the shock seen on the so-called “Liberation Day” in April 2025, when broad tariffs triggered a strong negative reaction in global markets.
“Hopes that the tariff situation had calmed down for this year have been dashed for now – and we find ourselves in the same situation as last spring,” said Schmieding.
Still, the analyst believes that recent experience may soften the reactions.
In the second half of last year, investors began to treat many trade threats as political noise, especially after agreements were signed between the US, the UK, and the European Union.
So, although the risk aversion Returning to the radar, the impact tends to be more moderate than in previous episodes.
The euro and the dollar are feeling the effects of geopolitical tensions.
In the currency market, the euro is already showing signs of weakness. Schmieding believes that the European currency may face additional pressure with the opening of Asian markets.
On Friday, the euro closed at around US$1,16, its lowest level since the end of November.
The dollar, on the other hand, exhibits more ambiguous behavior.
European stock markets hold firm and maintain positive performance.
Despite the increase in risk aversionEuropean stock markets remain resilient.
Germany’s DAX index and London’s FTSE have accumulated gains of over 3% this month, outperforming the S&P 500, which advanced about 1,3% in the same period.
This movement indicates that some investors differentiate the macroeconomic impact of political tensions from corporate performance, especially in sectors that are strategic for regional security.
Among the main beneficiaries of geopolitical tensions, the following stand out European defense actions.
The sector has accumulated a gain of nearly 15% in the month, driven by increased concerns about international security and territorial stability.
In addition to the US tariffs, the arrest of Nicolás Maduro The decision by US authorities contributed to raising the perception of global risk, increasing interest in companies linked to defense and security.
This movement reinforces the logic that, in times of political uncertainty, investors tend to seek out sectors considered strategic and less sensitive to traditional economic cycles.
US-EU trade relations at a delicate moment.
According to geopolitical strategist Tina Fordham, founder of Fordham Global Foresight, the scenario indicates an explicit return of transatlantic trade conflict.
“The trade war between the US and the EU is back,” he stated.
The assessment gains even more weight due to the timing of the American decision.
The tariff threats occurred precisely when the European Union and the Mercosul They were making progress toward signing a free trade agreement.
Outlook: short-term volatility and investment selectivity
In short, the new episode of geopolitical tensions tends to maintain the risk aversion high in the short term.
On the other hand, European defense actions They emerge as one of the main vectors of protection and opportunity amidst uncertainties.
See more at: Markets face new shock as Trump promises tariffs on Europe for Greenland.