European Stocks Get a Second Wind After Trump 'Chickens Out' on Tariff Threat
In a surprise move, US President Donald Trump announced he would withdraw his threat to impose fresh tariffs on eight European countries, sending shockwaves of relief through global markets. The news sparked a rally in European stocks, with the pan-European Stoxx 600 index surging 1.4% and Germany's Dax and France's Cac indices gaining ground as well.
The sudden U-turn comes after Trump had previously threatened to impose tariffs on several European nations, including Germany, France, and the UK, citing trade imbalances. However, in a dramatic about-face, he announced that he would no longer proceed with the plan, citing an unspecified deal with NATO Secretary-General Jens Stoltenberg.
Analysts are hailing this move as a return to the "Taco Trade," a term used to describe Trump's penchant for suddenly reversing his trade policies. Richard Hunter, head of markets at Interactive Investor, said, "It's the classic Taco trade – the pivot has left markets buoyant as the very real threat of a trade war has receded."
The news sent Wall Street on an upbeat note, with investors breathing a sigh of relief that the threat of a trade war had been averted. However, analysts caution that this reprieve is not permanent and that market participants will remain wary that the tariffs could be reinstated if talks with European leaders do not progress as desired.
The US dollar remained relatively flat against major currencies, while gold prices held steady near record highs, reflecting investor sentiment that investors are seeking safe-haven assets amid ongoing trade tensions. As Lee Hardman, a senior currency analyst at MUFG, put it, "Market participants have expressed initial relief that the threat of US military action or tariffs is off the table for now... Avoiding a tit-for-tat trade war is a positive development for the global growth outlook and supports our outlook for stronger growth this year."
For European markets, the reprieve from Trump's tariff threat has injected fresh momentum into their rebound, with investors looking ahead to further developments in US-Europe relations. As Neil Wilson, a strategist at Saxo, observed, "From the market point of view, it's the classic Taco trade – the pivot has left markets buoyant as the very real threat of a trade war has receded."
In a surprise move, US President Donald Trump announced he would withdraw his threat to impose fresh tariffs on eight European countries, sending shockwaves of relief through global markets. The news sparked a rally in European stocks, with the pan-European Stoxx 600 index surging 1.4% and Germany's Dax and France's Cac indices gaining ground as well.
The sudden U-turn comes after Trump had previously threatened to impose tariffs on several European nations, including Germany, France, and the UK, citing trade imbalances. However, in a dramatic about-face, he announced that he would no longer proceed with the plan, citing an unspecified deal with NATO Secretary-General Jens Stoltenberg.
Analysts are hailing this move as a return to the "Taco Trade," a term used to describe Trump's penchant for suddenly reversing his trade policies. Richard Hunter, head of markets at Interactive Investor, said, "It's the classic Taco trade – the pivot has left markets buoyant as the very real threat of a trade war has receded."
The news sent Wall Street on an upbeat note, with investors breathing a sigh of relief that the threat of a trade war had been averted. However, analysts caution that this reprieve is not permanent and that market participants will remain wary that the tariffs could be reinstated if talks with European leaders do not progress as desired.
The US dollar remained relatively flat against major currencies, while gold prices held steady near record highs, reflecting investor sentiment that investors are seeking safe-haven assets amid ongoing trade tensions. As Lee Hardman, a senior currency analyst at MUFG, put it, "Market participants have expressed initial relief that the threat of US military action or tariffs is off the table for now... Avoiding a tit-for-tat trade war is a positive development for the global growth outlook and supports our outlook for stronger growth this year."
For European markets, the reprieve from Trump's tariff threat has injected fresh momentum into their rebound, with investors looking ahead to further developments in US-Europe relations. As Neil Wilson, a strategist at Saxo, observed, "From the market point of view, it's the classic Taco trade – the pivot has left markets buoyant as the very real threat of a trade war has receded."
i was really worried about this trade war thingy happening between US and europe 
but trump just pulled back and now european stocks are up 
that's kinda cool i guess ? 
i mean it's not like anything good ever happens when there's a chance of tariffs being imposed on goods we import 
anyway, let's just enjoy this small win for now 
I'm so relieved that Trump backed down on those tariffs 
! I mean, can you even imagine how bad this would've been for European economies? The thought of it was literally keeping me up at night 
. And now, European stocks are surging 
- it's like a weight's been lifted off their shoulders 
. But let's not get too carried away here... we all know Trump can flip his script in a heartbeat 
. One minute it's trade war, the next it's "oh, I've changed my mind" 
. It's like he's playing some kind of twisted game with our global economy 
. Anyway, at least we can all breathe a sigh of relief... for now 
Trump chickened out on the tariffs and europe is like "wheeee!" 
the stoxx 600 index is up 1.4% and german and french stocks are riding high too 
️ i mean who needs stability when you can have a dramatic u-turn? 
anyway, let's not get ahead of ourselves... market participants are still on edge, so don't expect this reprieve to last forever 
i mean who needs tariffs when you can just call it off lol. seriously tho, this is like a shot in the dark for european stocks. one minute they're plummeting and the next they're surging. market participants need to keep their eyes on the prize and not get too comfortable. still, it's nice to see some relief for all those eurozone investors 
he's like that one uncle who always changes his mind but somehow comes out on top 
i'm still watching from the sidelines though, can't trust anyone 
. The markets are already feeling better, and that's gotta be good for us regular people who just want our investments to grow 
just a bunch of countries gonna lose billions and nobody gets anything in return. seems like more of a game of chicken than actual diplomacy 
anyone else surprised he chickened out? markets are already getting hyped about it, can't wait for the inevitable 
THEY CAN NOW FINALLY BREATHE EASY AGAIN AND FOCUS ON GROWTH INSTEAD OF FEAR OF TRADE WAR 
NOW LET'S SEE IF TRUMP REALLY DELIVERS OR JUST CHANGES HIS MIND AGAIN 
. market participants are still on edge, waiting to see if trump comes back on his threat. and honestly, i'm still worried about the impact on the global economy 
. gold prices holding steady near record highs is a good sign, but we need more than just one trade deal to make me feel safe 
.
I'm so curious about this sudden U-turn by Trump... why did he just change his mind like that? 
. It was like a weight had been lifted off European stocks and they're all back on track now 
. Anyway, I guess it's a win for European markets for now and they can just get back to being stable 
anywayz, i guess this news is kinda good for european markets or whatever... can someone explain what a stoxx 600 index is tho? 
and yeah, the markets are definitely reacting well to it, who doesn't love a good taco trade? 
i was worried that europe and us were gonna go to war over tariffs lol the taco trade is like trump's superpower 
. but then he just 'chickened out' and now markets are soaring everywhere 
. anyway i heard it's all because of some deal with nato or something lol not really sure what that means but as long as tariffs are off the table i'm good 
just saw that trump 'chickened out' on tariffs and european stocks are back in the green 
think this is good news for global markets, but also be careful - it's not like trump will just forget about his promises