Trade Policy and Tariffs
Trump has temporarily suspended 20 percent tariffs on EU goods exports, yet the fundamental orientation remains protectionist. The “Liberation or Reciprocity Day” he proclaimed on April 2, 2025, marks the starting point for negotiations with maximum demands, leading to short-term market volatility. However, in the long term, this could accelerate European integration as countries are forced to adapt their trade rules and strengthen the internal market.
Currency Policy and Dollar Weakening
Trump’s intention to strategically weaken the US dollar aims to increase the competitiveness of American exports. This could redirect capital flows into other currencies and destabilize currency markets. For European exporters, a weaker dollar means higher price pressure.
Fiscal and Tax Policy
While the US is tightening its fiscal policy, Europe is loosening its budget policy – a divergence with global ripple effects. Trump’s planned tax reforms could relieve US companies, but at the same time create long-term growth risks through cuts in the public sector, such as research budgets.
Impacts on Europe
According to the report “Trump The Unifier” by the research firm BCA, Trump’s policies could indirectly lead the EU to:
- Intensify coordinated fiscal support,
- Implement monetary easing by the ECB (interest rate cuts),
- Experience a new boost in integration within the internal market – for instance, through harmonized regulation or joint investment programs.
Risks for Science and Innovation
Trump’s “Project 2025” includes drastic cuts for universities and research organizations, as well as politically motivated interventions in research topics. This threatens not only US innovation capacities but also international collaborations.
Strategic Recommendations for Investors
| Area | Measures |
|---|---|
| Stock Markets | Factor in volatility; review sectors dependent on exports |
| Currency Risk | Consider diversification into non-Dollar assets |
| European Bonds | Utilize ECB easing expectations (consider interest rate change risks) |
| Infrastructure | Keep an eye on China’s planned major projects as a counterbalance to US protectionism |
The combination of trade policy uncertainty and currency policy experiments requires an agile portfolio strategy focused on resilience against geopolitical shocks.