Dollar Slides as Trump Tariff Threats Rekindle Trade Fears
Friday 23rd May 2025 – 14:22 (BST)
The US dollar fell to new lows this week after Donald Trump threatened to impose 50% tariffs on EU imports starting in June, reviving fears of tit-for-tat trade policies from earlier in the year. The announcement, though unconfirmed, stoked investor unease over global growth and sent capital flowing into European and Asian currencies and assets.
Markets interpreted the move as a signal of renewed protectionism, which could suppress US demand for foreign goods and reduce dollar outflows, but also deter investment in dollar-denominated assets. Trump’s mention of tariffs on Apple products added to concerns about the outlook for major US multinationals.
The dollar was already under pressure following the House’s approval of a tax bill expected to widen the federal deficit, just days after rating agencies downgraded US credit on debt sustainability grounds. Together, these developments have reinforced investor caution and raised questions about the dollar’s safe-haven status.