After climbing to a five-day high on Friday, the European carbon market opened the week with sharp losses as the tariff saga continued to unfold over the weekend. The December 2026 EUA contract settled at €71.38, down 3.25% on the day, wiping out all of the previous session’s gains.

Monday’s decline was largely driven by renewed uncertainty over US tariff policy after the Supreme Court ruled on Friday against Trump’s earlier trade measures. Over the weekend, the president said tariffs would be increased to 15%, up from the 10% announced immediately after the court’s decision.

“A resurgence in trade uncertainty dominated global markets this week as U.S. President Donald Trump’s new blanket tariff rate is expected to take effect from Tuesday, fuelling ambiguities about trade deals struck last year,” Reuters reported.

The downside move accelerated in the afternoon after what Carbon Pulse described as “the second-weakest auction since the EU ETS began” triggered additional selling, reinforcing the bearish tone. The 1.04 cover ratio pointed to subdued demand, while the clearing price came in at a notable discount to the secondary market.

The European carbon market remained under pressure on Tuesday, as traders awaited Donald Trump’s address to Congress later that night, which was expected to include further signals on tariff policy.