U.S. Dollar Falls on Trump Tariffs: The U.S. dollar falls on Trump tariffs after President Donald Trump proposed a 50% tariff on EU goods. The announcement came on Friday, May 23, 2025, through his social media posts. Trump criticized the European Union and said talks were going nowhere.
He also threatened a 25% tariff on iPhones made outside the U.S. This raises fresh concerns over global trade and economic growth. Investors reacted by selling the dollar across markets. As a result, the greenback dropped sharply against major currencies. The move also affected U.S. stocks, which fell in response to the renewed trade tension.
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U.S. Dollar Falls on Trump Tariffs: Insights
- Trump proposed 50% tariffs on European Union goods starting June 1.
- He also warned of 25% tariffs on Apple iPhones and other smartphones not made in the U.S.
- The U.S. dollar falls on Trump tariffs, dropping 1% against the Japanese yen to 142.48.
- The dollar index hit a three-week low at 99.09, down 1.9% for the week.
- The euro rose 0.8% to $1.1363, its highest in two weeks.
- The yen gained support from Japan’s rising inflation, sparking rate hike expectations.
- Sterling climbed 0.9% to $1.3533, reaching a three-year high.
- Moody’s recent downgrade of U.S. debt added pressure to the dollar’s performance.
- Stocks fell alongside the dollar, showing reduced faith in U.S. policy.
- Analysts expect continued volatility in global markets.
Background
The U.S. dollar falls on Trump tariffs as trade disputes intensify. The U.S. has already imposed duties on China, Mexico, and others in recent years. Now, tensions with the European Union have escalated. Trump’s administration claims the EU has made weak offers in trade talks.
This latest move mirrors past trade war tactics that unsettled global investors. It also adds to growing concerns about the U.S. economy and policy direction. Moody’s downgrade of U.S. debt last week further hit investor confidence. These events combined to spark a sharp fall in the dollar across global markets this week.
Main Event
On Friday, May 23, 2025, the U.S. dollar falls on Trump tariffs as the President renewed threats against the European Union. He suggested a 50% tariff on EU goods starting June 1. Trump accused the EU of being hard to negotiate with and failing to offer fair trade deals.
He also warned that Apple and Samsung phones not made in the U.S. could face 25% tariffs. These threats came via Trump’s social media, sending markets into a tailspin.
The dollar dropped 1% against the Japanese yen to 142.48, marking a two-week low. For the week, it was down 2.2%, its largest weekly decline since April 7. The euro surged to $1.1363, up 0.8% on the day and poised for its best week in six weeks. The dollar index fell 0.8% to 99.09, the lowest in three weeks.
Global stocks followed the dollar’s slide. Treasury Secretary Scott Bessent defended the President’s stance, saying the EU had not offered quality proposals. Jayati Bharadwaj of TD Securities noted that the dollar is no longer seen as a haven. She explained that recent risks have focused on U.S. politics and economics.
Japan’s yen rose after data showed strong inflation, increasing the chances of a rate hike. Meanwhile, concerns remain over the U.S. debt, which sits at $36 trillion. A new tax bill could raise that figure even more.
Also Read | German Economic Growth 2025 Surprises With Strong Q1 Boost From Exports and Industry
Implications
The U.S. dollar falls on Trump tariffs has wide effects. Investors are losing trust in U.S. trade policy. Market confidence has dropped, as shown by falling stocks and the dollar’s decline. Businesses worry that higher tariffs will raise costs and reduce profits.
Consumers may face higher prices, especially on imported tech goods like smartphones. The European Union might respond with its tariffs, increasing global tensions.
Japan’s possible rate hike may also attract more foreign investments to the yen, further weakening the dollar. With debt concerns rising and policy trust falling, the U.S. could face tougher economic conditions in the short term.
Conclusion
The U.S. dollar falls on Trump tariffs, reflecting deeper concerns about trade, debt, and U.S. policy direction. As Trump targets the EU and global companies like Apple, markets remain unsettled. Rising inflation in Japan and the downgraded U.S. debt rating add to the uncertainty.
Experts warn that if trade tensions continue, investor sentiment could worsen further. All eyes are now on how the EU and Congress respond. In the coming weeks, any shift in U.S. policy or fresh tariffs could swing markets again. For now, the dollar remains under heavy pressure.
