Market turmoil set to continue but could negotiation ease path for EU?

Monday was described as a "bloodbath" by some analysts after Asian and European shares plunged with investors fearing the tariffs Donald Trump has likened to "medicine" could lead to inflation and a global recession. 

The EU markets are in turmoil as the 27-nation bloc faces 25 percent import tariffs on steel and aluminium and cars and "reciprocal" tariffs of 20 percent from Wednesday for almost all other goods under Trump's policy to hit countries he says impose high barriers to U.S. imports.

After meeting in Luxembourg on Monday to debate their response, EU ministers agreed they preferred negotiations to remove levies. So, is there hope a trade war can be averted in Europe?

Tariff medicine

Financial expert Susannah Streeter believes the market gloom will not be going away anytime soon, but being open to convince Trump to compromise could bear fruit.

"I think we're going to see continued volatility, but I think a lot is going to depend on what we hear from President Trump in the coming days," Streeter – financial service provider Hargreaves Lansdown's Head of Money and Markets – told Juliet Mann on CGTN Europe.

"He said that this tariff policy was a medicine. That spread concerns about the bitter pill that the global economy is going to have to swallow and led to fresh worries about global growth and a potential looming global recession and that's why you've seen these steep falls. 

"All of this added up to a climate of fear and worry emanating right the way through stock markets. If there are signs that President Trump does decide to roll back, or at least a little bit, on some of these tariffs, you might see some of the losses pared back. You could see a bit of a turnaround, but I think volatility is here to stay for the time being. 

"You have seen some noises coming from Europe about the fact that they do not want to impose really steep tit-for-tat tariffs. That's partly why you've seen some of the losses pared back on Monday. So the DAX (in Germany) was initially down a lot more and it's gained some ground amid hopes you won't see a further escalation and that leaders will wait and see how all of this plays out. 

"The danger is, for example, for the wine industry. If extra tariffs are then put on U.S. goods, then Trump has vowed to retaliate and slam even further tariffs on the wine industry. You've already seen the likes of luxury goods maker LVMH, who owns Moet Hennessy, with their shares down really sharply. But there will be some hope that there is room for negotiation."