The European Parliament has delayed approval of the EU–US trade deal. Lawmakers are concerned that a new, one-sided 15% US tariff breaks the Turnberry accord agreed last summer. Trade tensions are still high after the delay.
China has called on Washington to remove unilateral tariffs. India has postponed planned trade talks. The UK has warned it may respond if the US does not stick to their 10% tariff deal.
Global Tariff Framework Begins Today
A new global tariff framework starts today with a 10% tariff. The US administration is working to raise this global tariff to 15% under a separate order that President Trump has not yet signed.
President Trump is expected to deliver the annual State of the Union speech overnight in European time. This article was produced using an AI tool and reviewed by an editor.
The collapse of the EU–US trade deal points to higher market volatility. We should be ready for sharp moves in the coming weeks. We saw a similar pattern in 2025, when early tariff threats pushed the VIX (the market’s fear gauge) up more than 15% in one week. Options traders may consider ways to benefit from higher volatility, such as buying VIX calls or using straddles on major indices ahead of Trump’s speech.
In stock markets, some sectors may take the biggest hit. These include European carmakers and US tech firms with complex global supply chains. Last year, reports of progress on the Turnberry accord lifted shares in companies like Volkswagen and Caterpillar by about 4% on average. Those gains are now at risk of being wiped out. Traders could consider put options on industrial and semiconductor ETFs, such as XLI and SOXX, which have often underperformed during trade disputes.
Currency And Commodity Markets In Focus
In currencies, the US dollar may rise in the short term as a safe-haven asset. The euro is likely to face fresh pressure. EUR/USD has already fallen 0.5% to 1.0750 in overnight trading, showing the market’s immediate concern. In the trade conflicts of the late 2010s, the Chinese yuan weakened sharply against the dollar, and a similar move could appear in other major US trading-partner currencies.
Commodities, especially industrial metals and agriculture, are likely to be directly affected. Retaliatory tariffs often target these politically sensitive goods. For example, US soybean futures fell nearly 20% in 2018 after China imposed its own tariffs. Watch for unusual moves in steel, aluminum, and agricultural futures, as these may react first if tensions rise.
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