In a move that is sending shockwaves through global trade flows, US President Donald Trump has announced an additional 25% duty on Canadian steel and aluminum imports, bringing the total tariff to 50%. The policy, set to take effect on Wednesday, is already triggering market volatility beyond the metals sector.
In the immediate aftermath of the announcement, the euro surged 0.7% against the US dollar, reaching $1.091. Nigel Green, CEO of Global Financial Advisory Giant DeVere Group, stated: “It’s a sharp reminder that currency markets are not just about monetary policy but also about geopolitical realities. And right now, Trump’s aggressive protectionism is tilting the scales in favor of the euro.”
The economic implications extend beyond trade tensions, signaling a broader shift in global market dynamics under Trump’s leadership. “Investors are beginning to price in the risks of a more fragmented global economy, with supply chain disruptions and inflationary consequences in the US,” Green added.
European Markets See Renewed Optimism
Meanwhile, German policymakers are reportedly closing in on a defense spending deal, with Trump’s rhetoric prompting a broader increase in defense budgets across Europe. This development, combined with a weakening dollar, is fueling optimism in European markets.
“This combination of Trump-triggered eurozone fiscal expansion and dollar weakness is creating the perfect storm for a stronger euro,” noted Green.
Institutional investors and currency traders are already repositioning their portfolios in response to Trump’s latest economic maneuver. The dollar index, which measures the greenback against major currencies, has dropped to its lowest level since October—fueling speculation of further declines.
A stronger euro enhances the appeal of European assets. “Stock markets in Germany and France, often seen as barometers of economic confidence, are already drawing renewed interest from global investors. At the same time, European sovereign bonds are regaining appeal as a hedge against US volatility,” explained Green.
Strategic Opportunities Amidst Market Shifts
For proactive investors, the Trump effect on currency markets is creating clear opportunities. “Euro-denominated assets—equities, bonds, and alternative investments—are gaining favor as the US faces the risks of economic nationalism,” said the DeVere CEO.
He continued, “The man who has spent years railing against Europe’s trade policies is now inadvertently giving the euro its best run in months, as markets read Trump’s economic strategy as a reason to reallocate capital away from the US and toward Europe—investors should be prepared for more volatility, but also for strategic opportunities that emerge from these seismic shifts.”
Green concluded: “Trump’s trade war is Making the Euro Great Again.”
