Trump's potential 30% tariffs on EU imports could lead to a recession in Europe by late 2025, as European economies greatly depend on exports to the U.S. Analysts warn that these tariffs may negatively impact U.S. GDP growth, causing reductions of 0.1% this year and 0.3% next year. Despite current optimistic stock market sentiments, there is a risk of an escalation between the U.S. and EU that could exacerbate economic downturns. The European Central Bank's response will depend on future tariff developments.
Trump's tariff threat of up to 30% on EU imports is projected to tip Europe into recession by late 2025, with analysts highlighting the heavy reliance of European exporters on the U.S. market, especially in key sectors like autos and pharmaceuticals.
Oxford Economics forecasts that the tariffs could reduce U.S. GDP growth by 0.1ppt this year and 0.3ppts next year, affecting both the U.S. and European economies significantly. The overall impact of a sustained 30% tariff could severely hinder growth forecasts for the Eurozone.
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