President Trump’s so-called tariff “liberation day” brought significant financial fallout for the US, threatening the dollar’s supremacy and revealing deeper vulnerabilities in the US macroeconomic outlook. Fabio Sabatini writes that the threat to the dominance of the US dollar opens a window of opportunity for Europe.
With the Geneva agreement signed on 12 May, China joined the list of countries for which US tariffs have been scaled back to 10 per cent, following the financial turmoil triggered by “liberation day.” This levy comes on top of a 20 per cent tariff previously imposed as a punitive measure for China’s alleged role in the production of certain fentanyl components.
Yet the total still falls far short of the 80 per cent tariff Donald Trump had announced over the weekend. Markets reacted with relief: pressure on US Treasuries eased, and the dollar regained about one per cent against the…
