European Economic Growth Could Decline by Up to 0.5% Due to Tariffs (ECB)

9:56 AM 20 March 2025

"Trade frictions are detrimental to global growth and welfare", Christine Lagarde just stated in Brussels.

During a session of the European Parliament, the President of the European Central Bank (ECB) addressed concerns and uncertainties regarding the escalating trade war between the European Union and the United States. ECB analyses indicate that economic growth in the Eurozone would decline 0.3% in response to the 25% tariffs imposed on European goods imported into the U.S. A retaliatory response from the EU could deepen this loss to 0.5%.

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On the other hand, there are additional concerns about inflation. According to Lagarde, the disinflationary process is on the right track, and her overall remarks suggest that the ECB is shifting the majority of its focus toward the risks of weak economic growth.

EUR/USD has been gradually falling below 1.09 since yesterday’s press conference by the Fed Chair.Source: xStation5

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