Equity markets surged on Monday, not because tariffs disappeared, but because they finally crystallised, according to a leading financial advisor.
After months of brinkmanship, investors were handed what they needed: clarity on EU-US trade. But beneath the market relief, a profound reshaping of global commerce is underway.
A deal was struck in Scotland over the weekend between US President Donald Trump and European Commission President Ursula von der Leyen, that averts an immediate transatlantic trade war, but still imposes sweeping 15% US tariffs on core EU exports, including automobiles, semiconductors and pharmaceuticals.
In return, the EU has agreed to spend $750 bln on American energy over three years, invest $600 bln in the US economy, and buy what Trump called a “vast amount” of military equipment.
“Markets rallied because the rules of engagement are finally known. But don’t confuse relief with reward,” said Nigel Green, CEO of global financial advisory giant deVere Group.
“This is a reset, not a resolution. A year ago, markets would have recoiled. Today, they’re simply grateful it wasn’t worse.”
In Trump’s own words, it’s “probably the biggest deal ever reached”. And in many ways, it is.
Germany secures a reduction in motor tariffs from 27.5% to 15%. But for many industries across the bloc, it’s a blunt blow.
There’s no exemption for steel or aluminium, where levies remain at a punishing 50%. Core sectors like French agriculture and Italian design face new hurdles with little clarity on relief.
“Trump played von der Leyen with precision,” noted Green.
“Europe avoided disaster, but locked itself into an imbalanced, high-stakes pact with no clear exit ramp. It’s the cost of certainty in an uncertain world, and the US extracted every ounce of leverage.”
Mixed reaction
The political reaction has been mixed, and telling.
Berlin hailed the deal for averting escalation. Paris called it “temporary” and “unbalanced.” Industry bodies across the continent labelled it painful and inadequate. But the market’s response tells a different story: clarity is currency.
“The global economy is being redrawn in real time. Trade routes are shifting. Capital flows are reorienting. Energy and defence are now the price of access to the US market,” said the deVere chief executive.
“Investors who understand this — and move quickly — will be the ones who come out ahead.”
The implications are vast. US energy producers are positioned for an unprecedented surge in European demand. Defence contractors stand to benefit from years of guaranteed procurement. European firms that can adapt supply chains or shift operations outside the bloc will gain competitive advantage.
“It’s a new era of trade-by-force and the old assumptions no longer apply.”
While European markets opened higher and the euro strengthened slightly on the news, the full effects are only just beginning to be priced in, according to deVere.
“Capital is going to follow certainty,” Green continued.
“We expect a near-term rotation into US defence and energy stocks, and selective upside in EU firms that pivot early. But this isn’t a blanket rally, it’s fragmented.
“This trade deal is a roadmap,” he said. “It tells us where the US is going, what it wants, and how it’s going to get it. Anyone ignoring this signal is going to be left behind.”
Green concluded that, “the tariffs are real. The costs are real. But so is the opportunity. We’re not going back to how things were. We’re heading into something radically new and the time to position for it is now.”
