Financiers are predicting a collapse of the euro if Trump wins

Former Republican President Trump is now tied with Democratic Vice President Kamala Harris, but Trump’s radical economic policies are likely to affect Europe as a major trading partner not only for the United States but for China.

If Trump wins, tariffs may increase and domestic taxes may decrease, which will serve as a kind of stimulus for the economy: the 10% US tariff on all imports and a 20% tariffs on Chinese products may lead to a sharp rise in the dollar. and a fall in the euro of 8-10%. The current rate is 1.083 euros/dollar. The euro last traded below parity in November 2022.

Both economic measures are likely to lead to higher inflation, with US interest rates rising significantly compared to Europe, which will increase the attractiveness of the dollar.

A more moderate trade war, in which Trump would impose additional tariffs only on China, would lead to a 3% drop in the euro, Cahill said.

However, in the event of a Democratic victory or in the event of a split in the Democratic government, “the dollar is likely to weaken initially as markets reassess their positions based on further expectations of a more significant change of tariffs,” said Goldman Sachs.

We remind you that the media wrote that Donald Trump improved his chances of winning, and the Democrat Kamala Harris began to lose her advantage over her opponent.