Trump’s Trade Policies Rattle Global Investors, Shifting Sentiment Toward Euro

Central bankers at a gathering in Aix-en-Provence highlighted growing unease over US economic policies under Trump. The combination of aggressive tariffs, public clashes with the Federal Reserve, and fiscal concerns stemming from the 2017 tax bill has eroded confidence in the dollar. Investors are increasingly viewing the euro as a haven—not due to Europe’s strength, but because America’s political and economic turbulence appears riskier.

Yannis Stournaras, Greece’s central bank governor, pinpointed three destabilizing factors: retaliatory tariffs, undermining of Fed independence, and long-term debt risks from tax cuts. "When you weaponize trade and institutions while ignoring fiscal sustainability, markets respond," he told CNBC. The euro’s recent gains reflect this calculus.

Ongoing US-EU trade negotiations remain unresolved, though new agreements with Britain and Vietnam signal a hardening tariff regime. Even reduced final rates haven’t dispelled concerns about lasting damage to US credibility. As Stournaras warned: "Tariffs are a boomerang—the thrower gets hit first."