ECB Raises Alarm Over US Tariffs Impact

The European Central Bank (ECB) issued a stark warning on Friday, highlighting how escalating global trade tensions, fueled by sweeping US tariffs, are casting a shadow over the eurozone's economic outlook.

Economic Bulletin Highlights Concerns

In its latest Economic Bulletin, the ECB pointed out that the timing of rate cuts, amidst growing uncertainty, could potentially derail the region's delicate recovery. "Disruptions to international commerce, financial market tensions, and geopolitical uncertainty are weighing heavily on business investment," the bulletin stated.

Resilience Amidst Challenges

Despite signs of easing inflation and resilient domestic demand, the ECB cautioned that increasing trade friction could dampen both investment and consumption. The eurozone economy, which saw a modest growth of just 0.2% in the final quarter of 2024, remains particularly susceptible to external shocks. This vulnerability comes at a critical time as policymakers strive to stabilize inflation around the 2% target.