The American customs tariff has become the largest headache in Europe as the punishment for the promise of the trade war, breaching the faltering economy in the region.
Besides making European goods such as wine, cheese and cars more expensive in America, the resulting commercial tensions will indirectly affect European consumers.
For one of them, the demand in the euro area will be hindered where the mass is considered whether it should continue to reduce interest rates later this month. The growth of the region remained positive but slow at the end of 2024, as inflation began to approach the European Central Bank’s standard by 2 %. However, factors such as consumer confidence began to find solid ground.
But the governor of the central bank in Greece indicated that the customs tariff can shake a lot of this progress. In fact, it can lead to a sharp drop in prices and cause a “negative demand shock”.
Yannis Stornarras told the Financial times.
While the apparent impact of the definitions is that it makes European goods more expensive for the Americans, Stornarras, who was previously a financial minister, is concerned that Europe will become a land dumped for cheap Chinese goods because the American market will be less tempting.
Last year, the European Union imposed accusations against dumping Against ChinaElectric cars try to control cheap Chinese goods from dumping European markets. China has responded with definitions on European pork as the mass continued to search for other industries for similar practices.
Stornarras chanted the feelings of the head of the European Union Committee, Ursula von der Lin, after the announcement of the customs tariff. In a televised interviewOn Thursday, she said The “European Union” will closely monitor the indirect effects that these definitions can cause because we cannot absorb the global excessive ability, and we will not accept to throw our market. “
Unlimited uncertainty
Trump’s tariff varies by country (based on a somewhat simplification formula), With the UK under 10 %, Switzerland faces 31 %, and China faces an additional 34 % on top of the previous fees. The European Union faces, on a large scale, a 20 % tariff on imports of the United States. This political transformation represents a silent moment in Trump’s presidency and the United States’ commercial relationship with most of the world.
And Andrew Kiningham, Capital Economics, wrote that “such a very high tariff so that it cannot be fully absorbed by consumers or producers. The strike to feelings may be greater than before,” wrote Andrew Kiningham, Capital Economics.
While the economies control the best path of work, the uncertainty they face may be the beginning of what is awaiting us only.
“Some people have been the point of view that” liberation day “could be the day of uncertainty at a peak, but I am not completely sure that this is the case.” Reuters said.
The European Union said it is working on counter -measures after a series of definitions in Trump if its diplomatic efforts fail. One of the possible ways is the match after the American technology giants responsible for Europe 109 billion euros Commercial deficit in services with the United States
Others are not sure that this is the best way. For example, the Prime Minister of Belgium, Bart de Weaver, was definitions as a “frenzy of wealth” and defended revenge for the same.
But if the mass follows this path, the growth of the trade war will be difficult to tame because it will turn the largest companies on both sides of the blessing into losses. The European Union has also presented the idea of digital services tax, but he did not have the consensus among its 27 members.
EURO Stoxx 50, the blue stock index in the region with 50 eight countries in the eurozone, has declined by 11.5 % in the past five days.
The European Central Bank was appointed to announce the following interest rate decision on April 17.
This story was originally shown on Fortune.com
https://fortune.com/img-assets/wp-content/uploads/2025/04/GettyImages-1745915716.jpg?resize=1200,600
Source link