Trump’s duties will slow the euro area by up to 1%
As of Wednesday, the EU will face 25% duties on the import of steel, aluminum and cars and « reciprocal » duties of 20% for almost all other goods.
In an interview with the newspaper, Sturnaras warned that the coming global trade war is rising to cause a major « negative shock in the demand » in the euro area, which can weigh on Europe’s economic growth.
| « Obviously adverse effects on growth can lead to much less activity than expected, leading to inflation under our goals, » said the Greek governer. |
Shtio Nozharov, BIA: Business will be squeezed by the import of cheap goods planned for export to the US
The European Central Bank estimates that the every 25% of the European imports of European imports will reduce the growth of the euro area by 0.3 percentage points in the first year. EU duties on the US would enhance this effect to half percent.
Sturnaras said duties are a deflationary measure and some of the US steps are « worse than expected », creating an « unprecedented » degree of « global political uncertainty », quoted by the Financial Times.
Borisov expressed concern about Trump’s duties, Kostadinov welcomed them
The next ECB decision on interest rates should be taken on April 17th. Inflation in the euro area dropped to 2.2% in March from 2.3% in February, reinforcing the arguments for a new reduction in interest rate from the European Central Bank later this month.
The import of US goods to the EU amounts to a total of EUR 334 billion in 2024 against EU exports to the United States for EU exports to EUR 532 billion.
On April 2, Trump announced a base rate 10% on the entire US imports, along with higher duties for dozens of other countries. Tariffs seem to be directed to about 60 countries.
