Trump’s 50% EU tariff thread is triggering market alarm bells

Donald Trump’s declaration that he will impose a 50% tariff on all European Union imports starting June 1 is not just shaking markets—it’s shaking long-term trust in US economic leadership, warns Nigel Green, CEO of global financial advisory giant deVere Group.

“This isn’t a strategic bluff—this is a destabilizing threat that could do real, lasting damage,” says Nigel Green.

“Markets are rightly alarmed. Beyond the short-term volatility, there’s a bigger risk unfolding: the risk of recession and erosion of US credibility on the global stage.”

The reaction was immediate. S&P 500 futures slid over 2% in early trading. Europe’s major indices—especially Germany’s DAX and France’s CAC—tumbled 2.7%.

“But the clearest warning came from the bond market.

“The 10-year US Treasury yield dropped 12 basis points to 4.10%—a huge move in a single session,” Green points out. “This is capital seeking safety and that’s a vote of no confidence in stability.”

Gold prices spiked nearly 2%, and the dollar gained against the euro, further proof that investors are rushing to hedge against geopolitical and policy unpredictability.

The threatened tariffs cover hundreds of billions in goods, including cars, machinery, wine, and pharmaceuticals. If enacted, they risk triggering a transatlantic trade war, stoking inflation in the US while choking off global trade flows.

“This is bad economics and it’s bad diplomacy,” says the deVere CEO. “You cannot keep threatening massive tariffs on allies and expect to maintain credibility. The world is watching and beginning to price in a future where US trade policy is impulsive and unreliable.”

He continues: “This kind of brinkmanship may win headlines, but over time, it weakens America’s role as a trusted economic partner. You can’t build lasting influence on erratic threats.”

deVere urged investors to stay focused not on political noise, but on market signals, especially in the bond space.

“The bond market is flashing red. It’s pricing in uncertainty, inflation risk, and a potential growth shock,” says Nigel Green.

“You don’t need to guess what happens next—just listen to the yields. They’re screaming that this is unsustainable.”

“The US risks trading away long-term credibility for short-term posturing. The markets are reacting now. But the consequences could last much longer.”