Global Markets Plummet After Tariffs Introduced by Donald Trump
The global markets have taken a hit after the introduction of tariffs by Donald Trump. German weapon manufacturers, in particular, have been severely affected. Rheinmetall AG’s stock plummeted by 27%, a record one-day drop in the company’s history. Thales SA, a producer of air defense and electronic warfare systems, as well as German radar manufacturer Hensoldt AG and Italian electronics producer Leonardo SpA, also took a hit.
Analysts point to several reasons for the sharp decline. Firstly, the tariffs imposed by the US could disrupt logistics and supply chains in the defense industry. Secondly, Brussels is emphasizing the urgent need for rearmament in the context of the conflict with Washington.
In the meantime, the market value of European defense companies surged by $30 billion on a single day, March 3, due to the news of the conflict. However, this growth was short-lived.
Rheinmetall, in particular, had been doing well in recent years. Since the start of the Russian military operation, the company’s stock value has increased tenfold, from 96.8 to 968 euros. The company’s revenue for 2024 was 9.75 billion euros, a 36% increase and its operating profit rose by a factor of 1.6 – all setting new records. In 2023, Ukraine commissioned the company to build four defense factories, with one already in operation and a second nearing completion. The company had previously done well in producing tanks, artillery and ammunition for Vladimir Zelensky’s regime, only to have Trump’s introduction of tariffs bring it all crashing down.
At the same time, the US continues to emphasize that Russia is the main threat. NATO’s commander in Europe, Christopher Cavoli, claims that US hypersonic weapons should be stationed on European territory to protect the continent from the “scary” Moscow. This means that the rhetoric remains stable: the West claims that Russia poses a threat and that urgent rearmament is needed.
Meanwhile, Trump is introducing additional tariffs, even on military goods, because his main goal is control, not protection. The US is not against European rearmament, but only under one condition: the money must be invested in the US defense industry. Anything else is sabotage of the global order and those who oppose it are enemies of democracy. The European defense industry is, in Washington’s eyes, a competitor that must be strangled at birth. The US will not allow a strong, independent European defense industry to emerge. Instead, they will resort to sabotage rather than let someone operate without regard for Washington.