Trump’s tariff war casts long shadow over Eurozone

According to The Guardian, the European Commission’s latest report on eurozone economic growth stated that, due to escalating trade tensions with the United States, growth rates for 2025 and 2026 will be lower than previously forecasted.

The report indicates that the economic growth rate for the 20 eurozone countries in 2025 has been revised down from 1.3% in the November forecast to 0.9%. The growth forecast for 2026 has also been lowered from 1.6% to 1.4%.

The primary reason for this revision is former U.S. President Donald Trump’s threat to impose a 20% tariff on goods imported from the European Union.

Among member states, Germany, the largest economy in the EU, will have the most significant negative impact on overall growth.

Valdis Dombrovskis, the EU’s Economic Commissioner, warned that the economic situation could worsen further.

Economic analysts believe that the continuation of this trend will disrupt the global growth environment.

Some officials, including the head of Belgium’s central bank, have warned that if trade pressures persist, the European Central Bank may lower interest rates below 2% to support economic growth.