EURUSD traders have started to experience some wild action with the new tariff news. Trump increased pressure on Greenland starting in 2026, but European countries did not back down. This triggered Trump’s favorite weapon to be drawn again: tariffs. Trump’s announcement of an extra 10% tariff on countries opposing the Greenland plan has many flaws. 

In the EU, where goods move freely without tariffs or borders, enforcing selective tariffs will be very hard for the US. Instead, if Trump is serious about the threat, he might consider tariffs on the whole EU. The European Union, as before, is trying to solve the problem diplomatically, but it might have to draw its own weapons in the end. According to the Financial Times, the EU is considering over $100 billion in counter-tariffs, which could ultimately trigger a trade war leaving both the US and EU economies weaker. I don’t think Europe will want this, but Trump is at his weakest point right now ahead of this year’s elections. If Europe stays strong for a couple of months on both the tariffs and Greenland, the pressure might ease afterward because Trump will have to offer something to voters to protect the Senate and the House and cannot enter a serious trade war. 

In other tariff-related news, the US Supreme Court will decide on the tariffs. If Trump loses in court, the US might have to compensate importers for losses due to unlawful tariffs, which could ease some inflationary pressure but would burden the budget. Trump is likely to find other methods to keep tariffs in place, but he might have to raise lower tariffs to maintain higher ones like those on China, which means he might have to keep the EU’s extra 10% indefinitely. 

EURUSD 

EURUSD broke out of the yellow trendline with the news. Before that, the pair was heading toward the lower line of the trend channel from July. The reversal is firm and has the potential to continue toward 1.20, but in the shorter term the 1.1720-1.1740 resistance might halt the advances. If broken, however, the upward pressure could lead to 1.1850 in the coming weeks.