Who Wins - and Who Loses - From the US - Europe Political Clash

The latest escalation between the US and Europe, sparked by tariff threats tied to Greenland and met with firm retaliation signals from Brussels, is quietly reshuffling capital. Some assets are being penalized. Others are being rewarded. That distinction matters.

US dollar

The most visible loser so far. In past geopolitical flare-ups, the dollar automatically benefited from safe-haven demand. This time, it hasn’t. Political pressure on institutions, uncertainty around trade rules, and renewed questions over policy stability are slowly eroding that premium. This isn’t a collapse, it’s a repricing of confidence.

US financial stocks 

Markets are also under pressure, and for good reason. Banks and payment firms sit closest to political decision-making, especially when rate caps, credit conditions, or regulatory shifts enter the conversation. When pricing mechanisms look vulnerable to political interference, capital steps back first and asks questions later.

Longer-dated US bonds are another soft spot:

Not because investors doubt repayment, but because rising political noise adds a risk premium at a time when debt levels are already high. 

Gold

The metal continues to attract steady inflows as markets become more cautious. Gold is behaving like a trust hedge, neutral, liquid, and outside political jurisdiction. Central banks have been sending that message for years. Markets are still echoing it.

Commodities 

More broadly are also benefiting. Real assets tend to do well when trade becomes fragmented and strategic stockpiling increases. They don’t rely on narratives alone but on scarcity.

European assets

European equities are under because markets punish export-heavy sectors first when trade tensions rise. Germany’s industrial base and France’s aerospace, defense, and luxury industries are deeply embedded in global supply chains.

Hedging instruments 

Are clearly in demand, with volatility products such as the Volatility Index climbing toward 20.5, the Swiss franc trading near record highs against other traditional safe havens like the dollar and the yen, while defensive stocks continue to find support.