Trump fired the first shot in a multifront trade war on Saturday when tariffs on

Mexico, Canada and China became a reality, Danske Bank analysts Senior Analyst and Chief Analyst note.

Impact on US economy to be moderate for now

"The tariffs are linked to border security and thus could be removed or reduced following negotiations. However, there is also a risk we see a tit-for-tat escalation in the short term. We also expect to see more tariffs on China later this year and that EU and possibly other countries will be hit as well before long."

"US growth may take a moderate short-term hit but fiscal easing keeps the medium term outlook broadly unchanged for now. Inflation will see a modest one-off impulse."

"The biggest impact for now may be the uncertainty the global economy is faced with, and supply chain planning for businesses have only become more tricky."