US President Donald Trump’s toxic tariff war is not only threatening the global trading system, but also undermining trust in US government bonds and the dollar. That should alarm everyone, because the global financial system rests on the premise that US Treasury bonds are the safest assets. But investors’ desperate search for alternative safe assets has also given the European Union an unprecedented opportunity. In addition to satisfying growing investor demand, a large issuance of common EU bonds would strengthen Europe’s economy, security, and policymaking autonomy.The dollar – particularly long-term bonds issued by the US government – has long been the ultimate safe haven. Even when global turmoil originated in the United States, as was true of the 2008 financial crisis, investors have sought refuge in US Treasuries. But everything changed earlier this month.
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