Last Friday’s tariff announcement sent shockwaves through the market and dominated the headlines all weekend.

On Monday morning, I was eager to talk to Enrique about the economic implications of the “scary” tariffs the Trump administration was set to enact on Mexico and Canada the next day.

But almost immediately, he shut that down.

Focusing on the economic implications, he said, was entirely the wrong move. He was right; markets recovered in the blink of an eye.

And because of that, he told me with 100% certainty what Trump would do next.

So I wanted to rush you this special bonus issue of Truth & Trends to share what he told me with you.

Trump’s Next Target Is Clear As Day

At this point, it’s predictable. President Trump makes his move, announcing sweeping tariffs on a major trading partner, and sends markets into a panic.

The headlines explode, analysts issue dire warnings, and investors rush to sell.

Then, by Monday afternoon, negotiations have already begun and by Tuesday, the administration signals a path toward resolution.

We saw this exact sequence play out last weekend with Mexico and Canada.

The White House announced a 25% tariff on all imports from Mexico and Canada, plus a 10% tariff on Canadian energy.

Stocks tied to auto manufacturing, agriculture, and supply chains dropped sharply at Monday’s open. The media painted it as a catastrophe.

And then?

By Monday afternoon, negotiations were already underway. By Tuesday, the administration announced a 30-day delay in enforcement as Mexico and Canada agreed to ramp up border security efforts.

If this feels familiar, it should.

We’ve seen this exact playbook before with China in 2018, Mexico in 2019, and now again in 2025 with a whole host of new players.

Now, he’s going to target the E.U. And according to Enrique… it could be as soon as tomorrow.

Why the E.U.? Why Now?

Trump has always viewed the U.S.-E.U. trade relationship as unfair.

For years, he’s criticized the E.U.’s trade practices, calling it one of America’s biggest trade manipulators.

He imposed tariffs on European steel and aluminum in 2018 and nearly did the same to French wine, German cars, and Italian luxury goods.

This time, though, it won’t be empty threats.

That’s because, unlike the U.S., which grew at a solid 2.7% in 2024, the eurozone economy barely moved, expanding just 0.7% for the entire year.

By the final quarter of 2024, the European economy had stalled completely.

• Germany, the eurozone’s largest economy, shrank by 0.2%.
• France contracted by 0.1%.

Europe’s economy is struggling. And in response, the European Central Bank (ECB) was forced to cut interest rates to try and prevent a deeper slowdown.

That’s not what strength looks like.

This gives Trump leverage.

A U.S.-E.U. trade war would hurt Europe far more than it could hurt America.

The U.S. accounts for over 20% of the EU’s total exports, a massive chunk of their economy.

Meanwhile, the E.U. makes up only 5% of U.S. GDP.

That’s an uneven playing field. If Trump even threatens tariffs, European leaders will be forced to rush to the table.

The Subsidy Issue: Why Trump Will Frame This as ‘Fairness’

Trump isn’t just going to say Europe has an unfair trade advantage.

He’s going to point to one specific reason why the U.S. needs to impose tariffs: subsidies.

European governments pour billions into their industries, particularly agriculture, energy, technology, and manufacturing.

• Since 2015, the E.U. has provided more than € 170 billion ($183 billion) per year in energy subsidies alone.
• The Common Agricultural Policy (CAP) provides € 50-60 billion ($54-65 billion) annually to European farmers.
• French and German carmakers receive government-backed support that allows them to undercut U.S. competitors.

By contrast, the U.S. doesn’t subsidize its industries at nearly the same level.

Yes, Biden’s Inflation Reduction Act (IRA) of 2022 introduced some domestic subsidies. But overall, American companies must compete on their own in global markets.

So why wouldn’t the U.S. impose a tax on European imports to level the playing field?

It won’t be a trade war. It’ll simply be… fairness. And this will be Trump’s argument.

How This Will Play Out

We already know the sequence of events.

• Trump announces the tariffs, potentially as soon as tomorrow.
• Markets react. European stocks get slammed, while U.S. investors panic-sell trade-sensitive sectors.
• Negotiations begin. The E.U. scrambles to find a way to de-escalate.
• Concessions are made. Some tariffs stick, but the worst-case scenario is avoided.

Sound familiar? That’s because it is. This is exactly what just happened with Mexico and Canada.

The only difference? Europe is in a weaker negotiating position.

And what does Trump do when he has the upper hand? He’ll… ask for something. Doesn’t matter what or how much — we can’t predict something like that.

But no matter what, he’ll get it. Because that’s what he does.

The Market’s Response: U.S. Shrugs, European Stocks Crumble

If Trump pulls the trigger on E.U. tariffs, Enrique was saying that we shouldn’t expect U.S. markets to care much.

The S&P 500 has been through this before. Investors know that most tariffs don’t stick, or they get watered down in negotiations.

Yes, we’ll see an early dip. But by midweek, the market will likely move on.

Europe? That’s a different story.

• Germany’s DAX and France’s CAC 40 will take major hits.
• Luxury brands like LVMH, Hermès, and Richemont will tumble.
• Auto stocks like Volkswagen, Mercedes, Stellantis will see sharp losses.

Unlike the U.S., Europe hasn’t built up a tolerance to Trump’s trade threats.

This weekend, maybe even a week or two away, when Trump inevitably makes his move, don’t fall for the media hysteria.

The U.S. market has seen this before. The real shockwaves? They’ll be in Frankfurt and Paris.

Because this time, Europe is the one that has the most to lose.

We’ll cover everything along the way and make sure you’re ahead of whatever’s coming.