Three recent interventions by the Trump administration are having a major impact on financial markets.

First, plans for a cryptocurrency strategic reserve were announced, helping to light a fire under Bitcoin and other digital assets.

Those gains were soon erased however when, against hopes of a last-minute reprieve, 25% tariffs were introduced on Canada and Mexico along with a 10% levy on Chinese goods.

Canada and China introduced retaliatory measures of their own, raising fears of a prolonged and broad-based global trade war.

Then the White House announced it would suspend military support to Ukraine in the wake of an Oval Office spat between president Donald Trump and vice-president JD Vance and the country’s premier Volodymyr Zelenskyy.

A day earlier, a gathering of European leaders to discuss support for Ukraine had sparked big gains for the continent’s defence stocks which were extended on the fresh developments.

Until recently, despite his avowed pro-crypto stance, president Donald Trump had simply brought to a close enforcement actions against the industry, but the announcement of a strategic reserve suggests potential for the US government to buy crypto at regular intervals.

A White House cryptocurrency summit on 7 March may reveal more about how the strategic reserve might be established – several relevant proposals are already working their way through federal and state legislatures.

Nigel Green, chief executive of advisory group deVere, was in no mood to downplay the gravity of the latest news on tariffs.

‘The market implications are vast. The US dollar, often buoyed by trade tensions, is likely to maintain resilience as investors flock to perceived safety. Commodities, already in high demand, could experience further price surges, benefiting energy and industrial sectors.

‘Meanwhile, domestic manufacturing stocks stand to gain as supply chains adjust to new tariff realities. At the same time, businesses reliant on imports face rising costs, forcing either a margin squeeze or price increases for consumers.’ 

Suggestions European countries will step up their support for Ukraine have seen shares in BAE Systems (BA.), Germany’s Rheinmetall (RHM:ETR) and France’s Thales (HO:EPA) surge, the latter also helped by better-than-expected results on 4 March.

BAE Systems is now up 175% on its level before the invasion of Ukraine in February 2022, although Shore Capital analyst Jamie Murray notes the company is largely reliant on long-term programmes rather than areas like munitions where demand may come through in the near term.

He adds: ‘In addition, BAE is vulnerable to DOGE related cuts given 44% of its revenue comes from the US.’

Notably, while European arms makers have been soaring, their US counterparts have seen their share prices come under pressure. 

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