"Now, the U.S. faces the prospect of a new cycle of retaliation and escalation. On Saturday, French President Emmanuel Macron hinted at what comes next. "Tariff threats are unacceptable and have no place in this context. Europeans will respond in a united and coordinated manner should they be confirmed," he posted on X. "We will ensure that European sovereignty is upheld.""
"It wasn't supposed to be like this. Wall Street, Corporate America, and consumers were looking ahead to an economic boost from tax cuts in Trump's One Big Beautiful Bill Act as well as more calm on the trade front. On Friday, analysts at Bank of America highlighted an exceptionally upbeat forecast for 2026 GDP growth, putting it a 2.8%-well ahead of the consensus for 2.1%."
After a turbulent 2025, tariffs returned in early 2026 when President Donald Trump announced 10% tariffs next month on eight NATO allies, rising to 25% by June until a "Deal is Reached for the Complete and Total purchase of Greenland." Trump also said countries that do business with Iran would face a 25% duty on U.S. trade, threatening a fragile tariff cease-fire with China. European leaders signaled coordinated retaliation, with Emmanuel Macron calling tariff threats unacceptable and promising to uphold European sovereignty. The moves jeopardize optimistic U.S. growth forecasts and Federal Reserve assumptions that relied on calmer trade policy.
Read at Fortune
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