- In a social media post on Friday, US president Donald Trump recommended a 50 per cent tariff on goods from the European Union (EU) beginning on June 1, 2025
- The tariff has since been delayed until July 9 to allow for negotiations
- Despite tariff risks, the EU remains an essential component of a globally diversified portfolio
In a social media post on Friday, US president Donald Trump recommended a 50 per cent tariff on goods from the European Union (EU) beginning on June 1, 2025, citing a “totally unacceptable” trade deficit of more than US$250 million per year.
(Source: Truth Social)
The tariff has since been delayed until July 9, following a Sunday conversation between Trump and Ursula von der Leyen, the president of the European Commission, who managed to reason her way to an extension.
“The EU and US share the world’s most consequential and close trade relationship,” von der Leyen commented in a social media post of her own, confirming that “Europe is ready to advance talks swiftly and decisively.”
The latest in Trump’s global trade spats, all of which rest on his misunderstanding of trade deficits, begs the question about your portfolio’s European exposure and why an allocation to the continent is warranted for active and passive investors alike.
From a passive perspective, the data is clear. While US stocks have outperformed about 70 per cent of the time since 1969, the rest of the world has led for the remainder – traversing wars, recessions and the full breadth of geopolitical tension – granting developed and emerging markets a key role in your portfolio’s overall long-term return. A recent article by J.P. Morgan offers some guidance towards a potential allocation.
From an active investor’s perspective, Stockhouse readers are well aware that the EU offers access to attractive businesses with clear potential for meaningful value creation. Surveying the Buzz on the Bullboards, we find a handful of prospective names, including:
- Tilray Brands (TSX:TLRY), a global cannabis company with a leading European presence optimally positioned to pursue growth and take advantage of new legal markets from a position of strength.
- Vermilion Energy (TSX:VET), a global oil and gas explorer and developer with a multi-national European footprint, robust exploration upside and C$27.62 per share in reserves, with shares last trading at C$8.77.
- Bombardier (TSX:BBD.A), a profitable jet maker with a customer fleet of over 5,100 aircraft around the world and 17 facilities strategically spread across Europe to better serve their needs.
- Almonty Industries (TSX:AII), a tungsten explorer and producer on a path to becoming a leading supplier of non-Chinese tungsten, helping to shift control of the critical metal’s supply chain to the free market.
While there’s clear utility for an investor to stick with what they know, adding opportunities to their “too hard pile” as needed, limiting portfolio diversification and the geographical reach of their due diligence process is simply nonsensical.
Whether you index, pick individual stocks, or both, the European continent’s appeal is undeniable as a trusted, well-established market where entrepreneurs can take risks under the rule of law.
Join the discussion: Find out what everybody’s saying about tariff talks between the United States and the European Union on Stockhouse’s stock forums and message boards.
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