Donald Trump's second presidency may significantly alter international relations, particularly concerning the strained ties between the USA and the European Union.
U.S. Credit Rating Faces Downgrade in Europe
A warning about a potential cooling in U.S. and EU relations came from Scope, a credit rating agency, on April 15, 2025, concerning a downgrade of the U.S. credit rating. According to their assessment, if the trade war doesn't cease, the U.S. credit rating may be lowered.
As of now, the U.S. rating from Scope stands at AA with a negative outlook. This situation is further complicated by market expectations of potential downgrades.
USD-Pegged Stablecoins vs Euro
An important narrative expressed on the same day as Scope's report raised concerns over the threat of USD-pegged stablecoins to the Euro. Italian Economy Minister Giancarlo Giorgetti urged EU officials to accelerate work on a digital Euro to enhance the Euro's status as an international currency.
The main issue is that Europeans are leaning towards dollar-denominated stablecoins as they provide a convenient means for cross-border transactions.
Economic Consequences of the Trade War
The trade war has already impacted the U.S. dollar, which faced its worst decline in decades during April 2025. This situation undermines trust in the dollar globally. Experts suggest that a potential downgrade's implications will aggravate the conditions for U.S. economic development, making it harder to manage the national debt.
Trump's second presidency, along with the trade war and interactions with the EU, continues to significantly impact international currency relations and the economy.
