The Trump tariff storm is sweeping the world: safe haven assets are soaring, European industries are under pressure, and the trading system is facing an abyss

On July 12, 2025, a statement by US President Trump once again stirred up the global market - announcing that starting from August 1, a 30% tariff would be imposed on imports from the European Union, a 35% tariff on Canada, and plans to impose tariffs ranging from 15% to 40% on other trading partners such as Brazil, Japan, and South Korea. This policy, known as an upgraded version of the "reciprocal tariff", raises the 20% rate that was implemented in April by another 10 percentage points, like dropping a deep-water bomb on the fragile global economy. Market risk aversion sentiment instantly erupted: Spot gold soared to $3,370 per ounce, hitting a three-week high. Silver soared to $38.38 per ounce, reaching its highest level since 2011. The US dollar index jumped simultaneously to 97.85, with a weekly increase of nearly 1%. In the epicenter of the storm, Europe, German car stocks and French luxury goods were the first to be hit. The share prices of Volkswagen and BMW dropped by more than 2% in response. French cheese producers lamented that a "catastrophic blow" was sweeping through an export market worth 350 million euros.

The smoke of the trade war has spread from Trump's "revenge logic". He once threatened the EU by saying, "Any retaliation will invite the US to double back." This policy is even embedded in the framework of a "game of the coward" : on the one hand, he insists that tariffs are "a necessary response to unfair trade," while on the other hand, he leaves a vague window for negotiations. This strategy has placed the global economy on the brink of a cliff. Although European Commission President Ursula von der Leyen hit the "pause button" on July 13 and postponed the retaliatory tariffs on 21 billion euros worth of US goods originally scheduled for July 15, she still holds two sets of countermeasures worth a total of 93 billion euros - the first phase targets 21 billion US export goods such as aircraft and agricultural products, and the second phase is a 72 billion euro reserve list on standby at any time. French President Emmanuel Macron vowed to "defend European interests", while Italian Foreign Minister Giordano Tajani warned: "If the negotiations break down, 24 billion US dollars worth of American goods will be hit hard by tariffs!"

The tremor in the industrial chain has spread from the financial market to the real economy. German automotive giants have become the "disaster area" : Companies like BMW and Mercedes-Benz, which were already struggling with the current 25% auto tariff in the United States, have been forced to urgently restructure their cross-border production lines with the new rate increasing to 55%. Mercedes-benz's share price dropped by 2.1% in a single day, with analysts directly pointing out that "the lack of stable rules is killing the global industry." In the vineyards of Burgundy and cheese workshops in Normandy, France, the panic is even more concrete - a 30% tariff means that the prices of Brie cheese and Bordeaux red wine in the US have soared, and the French dairy market, which imports 350 million euros a year to the US, is facing a contraction. The president of the French Dairy Association, Huarre, urgently called out: "This is not a temporary crisis, but the collapse of permanent trade rules!" The more far-reaching risk lies in the internal division within the European Union: the German industrialists are calling for a tough countermeasure, while Eastern European countries such as Hungary are worried about the damage to their exports to the United States. If the EU retaliates against Boeing or agricultural products, it may trigger Trump to double taxes on strategic areas such as medicines and chips, and local frictions could slide into a full-scale trade war.

In this game, gold emerged as the biggest winner. Since 2025, the price of gold has soared by 28% cumulatively, far exceeding the 6.58% increase of the S&P 500 index and even outperforming traditional safe-haven assets such as US Treasuries. Munoz, a partner at Hamilton Capital, pointed out: "When the market foresees disaster, gold is the ultimate armor to hedge against uncertainty." The record increase in holdings by global central banks has further solidified the upward trend - the People's Bank of China has purchased gold for eight consecutive months, with reserves reaching 73.9 million ounces in June. A survey by the World Gold Council shows that 95% of central banks plan to continue increasing their holdings in the coming year, and 73% predict that the status of the US dollar as a reserve will decline significantly. Wall Street has quietly laid the groundwork for the next round of rally: Kuo Chih-chiang, the head of foreign exchange strategy at WRISE, suggests increasing holdings of gold stocks Barrick Gold and Newmont Mining around $3,100. The VanEck gold Miner ETF has achieved a year-to-date return rate as high as 55%, while physical gold bars are regarded by high-net-worth clients as a "value fortress with zero counterparty risk".

However, the cost of the trade war will eventually be borne by ordinary people. German Finance Minister Klingbel warned that "the cost of retaliatory tariffs will be passed on to American consumers," exacerbating already stubborn inflation. Opposition is also gathering within the United States. In April, the New York International Trade Court ruled that Trump's tariff policy was "beyond his authority". Members of both parties in Congress questioned the legality of the president's taxation, while small business owners complained about the sharp cost reduction and profit cuts. Under political pressure, Trump may face compromise: Polls show that his approval rating has dropped to a term low due to the tariff dispute, and the "reciprocal tariff Bill" in Congress narrowly passed by just one vote. If the economy is damaged, it may endanger the midterm elections.

August 1st is approaching. This tariff confrontation between the US and Europe has gone beyond the bilateral scope and has become another straw that breaks the global multilateral trading system. History has repeatedly proven that there are no winners in trade wars. When "America First" meets the EU's "defense toolbox", the cliffside game may push the world economy into an unknown abyss - whether the outcome is a hard landing or last-minute concessions, global enterprises need to be prepared for a second disruption in the supply chain. In an era of fragmented trade, the brilliance of gold might just be the most dazzling reflection of the crisis.