US-Europe Trade War 2026: How to Protect Your Wealth
Three strategic adjustments to navigate transatlantic trade tensions and a weakening dollar.
- The US Supreme Court annulled historic tariffs, but new 10% duties and a 15% EU-US agreement have reshaped the trade landscape.
- European markets are outperforming (CAC 40 +8.2%, DAX +10.5%) whilst the dollar’s 12% decline erodes returns on US-denominated assets for euro-based investors.
- Three strategic adjustments: geographical rebalancing towards Europe, currency hedging for dollar positions, and diversification into real and alternative assets.
What Has Changed Since February 2026
The trade war between the United States and Europe has taken a new form in 2026. Between the historic annulment of tariffs by the US Supreme Court, new 10% duties and a dollar in retreat of nearly 12% against the euro, the consequences for wealth management are significant.
The US Supreme Court’s landmark decision to annul several historic tariff measures marked a turning point in transatlantic trade relations. However, the imposition of new 10% customs duties on select categories, combined with a bilateral EU-US agreement setting a 15% rate on certain European exports, has created a complex and evolving trade environment. This reconfiguration directly affects sectors exposed to international trade: automotive, luxury goods, aeronautics and agriculture.
The Concrete Impact on Portfolios
European equity markets have responded positively to the stabilisation of trade tensions. The CAC 40 has gained 8.2% year-to-date, while the DAX has advanced 10.5%, outperforming US indices. This divergence reflects both the relative undervaluation of European equities and improved economic fundamentals in the eurozone.
Conversely, the dollar’s 12% decline against the euro represents a significant headwind for investors holding US-denominated assets. A portfolio with 40% US equity exposure would see approximately 4.8 percentage points of return eroded by currency effects alone, absent any hedging strategy.
| Index / Asset | YTD Performance | Currency Effect | Net for EUR Investor |
|---|---|---|---|
| CAC 40 | +8.2% | EUR | +8.2% |
| DAX | +10.5% | EUR | +10.5% |
| S&P 500 | +6.1% | −12% EUR/USD | −5.9% |
| Nasdaq 100 | +9.8% | −12% EUR/USD | −2.2% |
| Gold (USD) | +9.5% | Partial hedge | +6.5% |
“The dollar’s 12% decline is a wake-up call: currency risk is no longer a footnote in US equity performance — it is the headline figure for European investors.”Benjamin Cohen — Riviera Wealth Management
Three Strategic Adjustments
Geographical Rebalancing Towards Europe
The valuation gap between European and US equities, combined with improving eurozone fundamentals, supports an overweight position in European assets. Sectors benefiting from domestic demand — infrastructure, energy transition, defence — offer particularly attractive prospects.
Currency Hedging for Dollar Positions
For investors wishing to maintain US exposure, implementing currency hedges through forward contracts or hedged share classes can mitigate exchange rate risk. The cost of hedging has decreased following the narrowing of the EUR-USD interest rate differential.
Real and Alternative Assets
In a context of trade uncertainty, real assets (infrastructure, real estate, commodities) and alternative strategies (long-short equity, global macro) provide portfolio resilience, typically exhibiting lower correlation with traditional markets.
- The new 10% US tariffs and 15% bilateral EU-US rate create sector-specific headwinds for European exporters.
- The dollar’s 12% decline makes unhedged US exposure highly dilutive for euro-based investors.
- European equities offer compelling valuations relative to US markets and benefit from improving domestic fundamentals.
- Currency hedging is no longer optional for investors with significant dollar exposure.
- Real assets and alternative strategies provide resilience in a context of geopolitical and trade uncertainty.
This document is provided for informational purposes only and does not constitute investment advice, a personalised recommendation, or an offer to buy or sell financial products. Past performance is not indicative of future results. All investments carry risks, including the risk of capital loss. The information contained in this article reflects the analysis of Riviera Wealth Management at the date of publication and is subject to change. Riviera Wealth Management is a registered Financial Investment Advisor (CIF), ORIAS No. 11 060 879, member of the CNCGP.
