“The EU is lowering its economic growth forecasts due to Trump’s tariffs – PoliticoThe European Commission is lowering its growth estimates for the bloc in 2025 due to the consequences of Trump’s tariffs.
Uncertainty has reached the level of the beginning of the pandemic, and an escalation of tensions could reduce growth and revive
inflation.”, — write: unn.ua
DetailsThe eurozone is expected to grow by only 0.9% and the EU by 1.1% this year, according to the Commission’s annual spring forecast published on Monday.
This is a significant decrease compared to the Commission’s previous forecast in November, which predicted growth rates of 1.5% in the EU and 1.3% in the eurozone this year.
Meanwhile, global trade has been disrupted by Trump’s imposition of tariffs on major partners such as the EU and China.
The growth outlook has been significantly revised downwards. This is largely due to the weakening outlook for world trade and higher uncertainty in trade policy
Oil prices fall amid concerns over data from the US and China19.05.25, 10:59 • 3340 views
Higher US tariffs and trade uncertainty affect EU exports
He added that uncertainty in Europe has reached levels not seen since the start of the Covid-19 pandemic in 2020.
The risks to the outlook remain lower
He also said that an escalation of trade tensions in the coming months could further “reduce growth and revive inflation.”
As a sign of de-escalation, Trump halved tariffs on most EU imports to 10% for 90 days in April, which was intended to create room for a broader trade deal. EU experts used this as a baseline scenario for their forecast and noted that new trade agreements with other countries could stimulate growth in Europe.
The world was largely unprepared for a sharp protectionist shift in US trade policy
Trump will apply increased tariffs if countries do not negotiate “in good faith” – Bessenet19.05.25, 08:58 • 2420 views
The Commission noted that trade tensions between the US and China contributed to “uncertainty” that, more than tariffs, affected domestic demand. According to a recent agreement, the US lowered tariffs on Chinese imports from 145% to 30% for 90 days.
Meanwhile, the Chinese side agreed to abolish its tariffs from 125% to 10 percent. Despite growing trade tensions, inflation in the EU is expected to continue to decline over the next few years.
The euro zone is expected to reach the European Central Bank’s inflation target of 2% in 2025. Meanwhile, growth is expected to rise to 1.5% in the EU and 1.4% in the eurozone in 2026.
AdditionPresident Donald Trump announced the establishment of customs rates for US trading partners within 2-3 weeks. He noted that his administration cannot negotiate with everyone at once.