Trump tariffs risk large euro-area ‘demand shock’, central banker warns

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US President Donald Trump’s flashed tariffs are at risk of trigging a large “negative demand shock” in the Eurozone, a senior policy maker of the European central bank because the ECB has decided to lose interest later this month.

In an interview with the Financial Times, the Governor of the Central Bank of Greece, Yannis Stornarus, warned that the global trade war could lead to heavy weight on Europe’s economic growth. “A significant adverse effect on growth can be much weaker than expected, inflation under our goals,” he said.

One of the longest members of the ECB’s Governing Council, Stornarus warned that the Euro region faced shock at a time when the outlook for growth was already “modest” and the ECB’s medium-term target was inflation for 2 percent. ECB is ready to decide on its next interest rate on April 17.

Trump announced last week that Washington would put a stress 20 percent of the tariff Most EU imports.

The largest single export market for EU-based products in the United States, accounting for about 20 percent of the total export of the block in 2021. Although there is a possibility of tariff demand in the United States, economists are also concerned that even higher tariffs against China can rewrite Chinese -made products in Europe that can reduce Europe more conditions.

Was ECB before the announcement of Trump’s tariff last week Signal a possible break It cuts interest because it has adopted more thunderbols after taking the cost of orrow for the sixth time from mid -2021 to two and a half percent from last month. ECB president Christine Legard said in March that inflation in the Euro region could increase half a percent point points in the trade war due to “EU revenge system and weak Euro exchange rate”.

The Storynarus took the matter with this view of the euro region, “Customs is definitely a reflective system”. He emphasized that American security steps were “worse than expectations” and created an “unprecedented” degree of “global policy uncertain” dependent on economic activities.

Analysts and investors say Trump’s tariff announcements have increased the chances of another quarter-point at the end of this month. JPMorgan, who had earlier expected to hold a rate at a rate of 2.5 percent in April, changed its attitude and now predicted another quarter-point cut, two more will be followed in June and September. On Friday, the economists of the Goldman shot also said that there was a cut in April “very likely”.

If the situation is serious enough to justify the rate of 50 basic points, the stories have refused to comment.

Although “the impact of the tariffs was specifically evaluated” was difficult, the negative impact on the euro region growth “may be something between 0.5 to 1 percent points,” he warned. The ECB dropped its 2025 growth forecast for the euro region in March to just 0.9 percent.