Tariff talks and tensions
At the end of March, Donald Trump reiterated his threat to impose higher tariffs on the European Union and Canada if they “economically harm the United States” in retaliation for tariffs he had imposed earlier.
Such statements from the U.S. President continue to strain relations between the transatlantic allies. As one of the key indicators of the U.S. economy, the U.S. Dollar Index (DXY) remains not only an economic parameter but also a vital factor reflected in the dynamics of global markets, especially in times of geopolitical tension.
Looking at the DXY performance, the U.S. dollar has remained relatively resilient despite ongoing global uncertainty. After peaking above 114 in late 2022, it has moderated to around 103 points in April 2025, reflecting a more balanced outlook amid interest rate adjustments and softening inflation data.
Since its peak, the U.S. currency’s strength has experienced volatility, closely tied to Federal Reserve policy expectations and global trade developments.
“If the European Union works with Canada in order to do economic harm to the USA, large-scale tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had,” Trump wrote on the Truth Social network.
Recently, Donald Trump renewed his call for a 25% tariff on car imports into the United States, a move he frames as essential to safeguarding American industry — a continuation of his long-standing protectionist trade agenda.
European Commission President Ursula von der Leyen responded, calling the measure “bad for businesses and even worse taxes for consumers,” while Canadian Prime Minister Mark Carney labelled the tariffs a “direct attack” on Canadian workers and signalled possible countermeasures.
On Thursday, French Minister of Economics and Finance Eric Lombard urged Washington “to return to the table for meaningful dialogue.” The European Union, he said, had no choice but to stand firm in response to the U.S. “aggressive” trade policy.
“We are in a situation where we are under attack. Either we allow it and it never ends, or we retaliate. Unfortunately, that is the rule of the game imposed by the Americans,” he added. “I hope that when everyone understands that this [trade] war is going nowhere, we will be able to achieve a reduction.”
The EU has delayed the implementation of its latest round of countermeasures, including increased duties on American whiskey and motorcycles, until mid-April. Donald Trump, in return, has threatened to impose 200% tariffs on European wines and spirits. Lombard expressed optimism that negotiations could resume ahead of the upcoming International Monetary Fund meetings in Washington.
Meanwhile, the new round of tariffs on cars imported into the United States took effect on April 3, coinciding with Trump’s announcement of reciprocal tariffs on countries with persistent trade surpluses with the U.S.
These tariffs add to the legacy of trade barriers initiated during Trump’s earlier presidency, including duties on steel and aluminium, as well as various imports from Mexico, Canada, and China.
Another round of negotiations, expected in the coming days, will determine the evolution of the US-EU trade dispute. As for the measures already in place, time will tell whether Trump’s renewed trade policy push will truly “make America wealthy again.”