The EU downgrades 2025 growth forecasts due to tariff uncertainties
The post The EU downgrades 2025 growth forecasts due to tariff uncertainties appeared on BitcoinEthereumNews.com. The European Commission has revised down its growth projections for both the euro area and the wider EU, primarily because of the lingering uncertainty and heightened barriers in international trade stemming from US tariffs. In its annual spring forecast, released on Monday, the Commission now anticipates that the 20 countries sharing the euro will expand by just 0.9% in 2025, down from the 1.3% growth projected last November, while the full bloc of 27 member states is expected to grow by only 1.1%, as opposed to the 1.5% previously envisioned. US has maintained high duties on EU products This downgrade reflects the impact of US President Donald Trump’s administration maintaining elevated duties on key European exports, 10% across most goods and up to 25% on steel, aluminium and automobiles, and the knock-on effects of tit-for-tat measures by China and other trading partners. Commission economists stress that the resulting “weakening global trade outlook” and “higher trade policy uncertainty” have materially depressed export growth, with the latter now at levels not seen since the early days of the Covid-19 pandemic. Valdis Dombrovskis, the EU’s Economy Commissioner, told reporters that the prospect of enduring or even escalating trade tensions “continues to weigh heavily on Europe’s external demand.” He warned that further fragmentation of world trade could both drag down growth and rekindle inflationary pressures. Indeed, while consumer prices in the euro area are forecast to ease toward the European Central Bank’s 2% target by next year, any fresh rounds of tariffs or retaliatory measures could upset that disinflationary trend. The forecasts assume a baseline in which US duties remain at their current levels for 90 days, following a temporary decision in April to halve steel, aluminium, and vehicle tariffs from 25% to 10%. Brussels officials have used this pause as their scenario for…
The post The EU downgrades 2025 growth forecasts due to tariff uncertainties appeared on BitcoinEthereumNews.com.
The European Commission has revised down its growth projections for both the euro area and the wider EU, primarily because of the lingering uncertainty and heightened barriers in international trade stemming from US tariffs. In its annual spring forecast, released on Monday, the Commission now anticipates that the 20 countries sharing the euro will expand by just 0.9% in 2025, down from the 1.3% growth projected last November, while the full bloc of 27 member states is expected to grow by only 1.1%, as opposed to the 1.5% previously envisioned. US has maintained high duties on EU products This downgrade reflects the impact of US President Donald Trump’s administration maintaining elevated duties on key European exports, 10% across most goods and up to 25% on steel, aluminium and automobiles, and the knock-on effects of tit-for-tat measures by China and other trading partners. Commission economists stress that the resulting “weakening global trade outlook” and “higher trade policy uncertainty” have materially depressed export growth, with the latter now at levels not seen since the early days of the Covid-19 pandemic. Valdis Dombrovskis, the EU’s Economy Commissioner, told reporters that the prospect of enduring or even escalating trade tensions “continues to weigh heavily on Europe’s external demand.” He warned that further fragmentation of world trade could both drag down growth and rekindle inflationary pressures. Indeed, while consumer prices in the euro area are forecast to ease toward the European Central Bank’s 2% target by next year, any fresh rounds of tariffs or retaliatory measures could upset that disinflationary trend. The forecasts assume a baseline in which US duties remain at their current levels for 90 days, following a temporary decision in April to halve steel, aluminium, and vehicle tariffs from 25% to 10%. Brussels officials have used this pause as their scenario for…
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