The trigger for a stock market collapse has often been a schism between the US and Europe, and follows a period of over-exuberance.

Tariffs, in the shape of Smoot-Hawley, caused a beggar-thy-neighbour reaction from US trading partners in the 1930s and were a source of the Great Depression.

In 1987, a Bundesbank decision to increase interest rates was crucial in fomenting a market meltdown.

The trade imbroglio triggered by Donald Trump’s efforts to bully Nato allies into accepting his plans to dominate Greenland has the makings of a bigger crisis.

A relatively tame equity and bond market response in Monday trading reflected the fact that Wall Street was closed for the Martin Luther King holiday.

Pacific and European markets were trading in a vacuum with the dominant Dow Jones and tech-heavy Nasdaq markets on the sidelines.

One understands why the European Union, in defence of Nato members, is threatening to counter Trump’s proposed tariff with £81billion of tit-for-tat trade sanctions. In this case, Keir Starmer’s jaw-jaw rather than war-war looks more sensible.

The Liberation Day tariffs of April 2025 caused a 10 per cent drop in global equity prices. Even though they recovered, fuelled by the AI investment drama, the productivity revolution may still be years away.

The IMF’s latest World Economic Outlook looks dated before the ink has dried. The Fund economists credit easing trade tensions and higher fiscal stimulus as reasons why world growth this year will be robust at 3.3 per cent.

Rachel Reeves hailed the relatively upbeat UK forecast of 1.3 per cent this year and 1.5 per cent next as an unalloyed triumph.

But if big UK exporters such as JLR, Diageo et al find themselves locked out of the vast US market because of elevated tariffs, it could be an unalloyed disaster.

As always with Trump, there is speculation that the 10 per cent Greenland tariff, scheduled to eventually rise to 25 per cent, is chimera which can be negotiated away.

There is also a quaint belief that the Supreme Court will declare the President’s use of the trade weapon, without Congressional approval, to be illegal.

But no one should underestimate the ability of a wily and ruthless White House team to find a workaround.

The ultimate fear is that the bullying Greenland tariff becomes the straw which wrecks market confidence already stressed by uncertainty over leadership at the Federal Reserve and an AI bubble.

Nerve-racking days lie ahead and investors in those ultimate defensive assets, gold and silver, are taking no chances by going on a spree.

Mighty Quinn

Leo Quinn is the kind of unassuming executive needed in hard times. When he took on the role of chief executive at Balfour Beatty, the whole infrastructure sector was in dire straits after the implosion at Carillion. 

Under his leadership, the group’s fortunes were transformed. The value of the group’s unfashionable stock almost doubled during his stewardship.

His move to troubled WH Smith, up to its neck in an accounting mess, will come as an enormous lift. The 11 per cent rise in its stock demonstrated this.

As executive chairman, with the possibility of passing ‘Go’ and collecting a £24.5million fee, Quinn is testing the patience of

governance mavens. But all-powerful chairmen, even if backed by a chief executive, are the rage at present, following Archie Norman’s revival of M&S and a belief in Albert Manifold at BP.

Retail requires a peculiar set of skills. Quinn’s career in engineering has been very different. A smarter government would have enlisted him to bring the Northern Powerhouse railway to fruition, or discipline to HS2.

Grasping Gnomes

Despite the FTSE 100 scaling new heights, the London discount has not been wiped out.

Zurich’s £7.7billion opportunistic swoop on Lloyd’s broker Beazley sent the shares rocketing 42 per cent.

It follows several efforts by Zurich to persuade Beazley to submit to its charms.

The valuation looks light and speaks volumes for the way the London insurance market is prospering, with innovation including cyber. 

One fears that the pioneering, entrepreneurial City spirit would only be eroded by another overseas swoop.