The European carbon market extended its bullish streak on Friday, with the EUA Dec25 briefly reaching €80.37, its highest level since 13 February. Despite losing some momentum later in the session, carbon still managed to post a modest weekly gain of 0.65%, settling at €79.68.

EUAs turned lower following Trump’s latest social media post, in which he threatened to impose “a massive increase of tariffs” on China starting next month. The announcement triggered the steepest U.S. stock selloff in six months, with the S&P 500 sliding 2.7%—its worst day since April 10—erasing weekly gains, while the Nasdaq 100 plunged 3.5%.

However, over the weekend, Trump appeared to soften his stance in an attempt to calm tensions. On Sunday, the U.S. president posted once again on his social media platform that “it will all be fine!“ adding that “the U.S.A. wants to help China, not hurt it!!!”

On the other side, as reported by Bloomberg, the Chinese Ministry of Commerce urged the U.S. to stop making threats. “Threatening with high tariffs at every turn is not the right way to get along with China,” the Ministry said. “If the U.S. persists in its own course, China will resolutely take corresponding measures to safeguard its legitimate rights and interests.”

The prospect of a renewed tariff war has re-emerged as a key talking point among carbon market traders. Concerns that escalating trade tensions between the U.S. and China could dampen industrial output and energy demand are once again influencing sentiment, adding a layer of uncertainty to the otherwise bullish outlook for EUAs.

On Monday morning, the European carbon market opened lower even as broader financial markets advanced. The decline was partly driven by updated weather forecasts pointing to milder conditions later in the month. According to Reuters, “the current cold spell is expected to be short-lived,” which has eased expectations for energy demand.