Threat of euro-dollar parity returns on talk of Trump tariffs and rate cuts 

US tariffs could crimp global trade just as growth is slowing and central banks are cutting rates

The threat of tariffs from a Donald Trump presidency and ECB rate cuts sent the euro tumbling last week. Picture: Evan Vucci/AP

The risk of the euro sliding to parity with the dollar is mounting in financial markets after this week’s interest rate cut and stark reminder that a Donald Trump presidency could spark a global trade war.

Just days after Mr Trump suggested US tariffs could be aimed at Europe as well as China and other countries, ECB president Christine Lagarde warned that any barriers would pose a “downside risk” for the bloc’s already struggling economy.