President Donald Trump’s aggressive tariff measures could significantly impede economic growth in the Eurozone, potentially shaving off between 0.5 and 1 percentage points, according to Yannis Stournaras, the governor of the Greek central bank. Stournaras shared his concerns in an interview with the Financial Times published on Monday.
His comments come as European Union countries are considering approving a first set of targeted countermeasures on up to $28 billion of US imports – ranging from dental floss to diamonds – in the coming days, a response to the escalating trade tensions.
The 27-nation bloc faces 25% import tariffs on steel and aluminum and cars, in addition to Trump’s announced “reciprocal” tariffs of 20% from Wednesday for almost all other goods, creating a complex and challenging trade environment.
In his interview with the Financial Times, Stournaras warned that the growing risk of a global trade war could trigger a large “negative demand shock” in the Eurozone, potentially weighing heavily on Europe’s economic growth prospects.
“A notable adverse impact on growth could lead to activity being much weaker than expected, dragging inflation below our targets,” he told the FT, underscoring the potential for a significant economic downturn.
The European Central Bank (ECB) has previously estimated that a blanket US tariff of 25% on European imports would reduce Eurozone growth by 0.3 percentage points in the first year.
If the EU were to implement counter-tariffs on the US, this impact would increase to half a percentage point, highlighting the potential for a self-inflicted wound.
Stournaras emphasized that tariffs are fundamentally deflationary, with some of the US measures being “worse than expected,” creating an “unprecedented” degree of “global policy uncertainty,” according to the Financial Times report.
On April 2, Trump unveiled a 10% baseline tariff on all imports to the US, coupled with higher duties on dozens of other countries. These tariffs appear to target roughly 60 countries, significantly disrupting global trade flows.
US goods imports into the EU totaled 334 billion euros ($365.6 billion) in 2024, while EU exports to the United States amounted to 532 billion euros, highlighting the significant trade imbalance between the two economic powerhouses.
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