(Reuters) -U.S. President Donald Trump’s tariff measures could slow euro area economic growth by anywhere between 0.5 and 1 percentage points, Greek central bank governor Yannis Stournaras told the Financial Times in an interview published on Monday.
Stournaras’ comments come against the backdrop of European Union countries weighing approval of a first set of targeted countermeasures on up to $28 billion of U.S. imports from dental floss to diamonds in the coming days.
The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars and “reciprocal” tariffs of 20% from Wednesday for almost all other goods.
In an interview with the newspaper, Stournaras warned that the looming global trade war risk sparking a large “negative demand shock” in the Eurozone that could weigh heavily on Europe’s economic growth.
“A notable adverse impact on growth could lead to activity being much weaker than expected, dragging inflation below our targets,” he told the FT.
The European Central Bank has estimated that a blanket U.S. tariff of 25% on European imports would lower euro zone growth by 0.3 percentage points in the first year. EU counter-tariffs on the U.S. would raise this to half a percentage point.
Stournaras said that tariffs were a deflationary measure and some of the U.S. steps were “worse than expected” creating an “unprecedented” degree of “global policy uncertainty”, the FT reported.
The next ECB rate decision is due on April 17. Euro zone inflation eased to 2.2% in March from 2.3% in February, bolstering the case for another European Central Bank interest rate cut later this month.
U.S. goods imports into the EU totalled 334 billion euros ($365.6 billion) in 2024, against 532 billion euros of EU exports to the United States.
On April 2, Trump unveiled a 10% baseline tariff on all imports to the U.S. along with higher duties on dozens of other countries. The tariffs appeared to target about 60 countries.
(Reporting by Kanjyik Ghosh; Editing by Kim Coghill and Sonali Paul)
