<
https://www.theguardian.com/business/2025/feb/27/donald-trump-tariffs-on-eu-imports-could-trigger-economic-turmoil>
"Donald Trump’s threatened 25% tariffs on EU imports could trigger “economic
turmoil”, sharply push down growth and send inflation soaring, according to a
German thinktank.
The Kiel Institute said the US president’s promise on Wednesday that he would
impose the levies “very soon” was a profound moment in the postwar relationship
between Washington and Brussels and could prove to be an economic shock to both
parties.
It found that EU exports to the US would drop by between 15% and 17%, leading
to “a significant” 0.4% contraction in the size of the EU economy, while
American GDP would shrink by 0.17%.
Worse for the US would come from tit-for-tat tariffs by the EU, which would
double the economic damage and push inflation up by 1.5 percentage points, the
thinktank said.
German manufacturing exports to the US would be the worst hit, dropping by
almost 20%, the institute added.
Julian Hinz, Kiel’s head of trade policy, said: “European economies aren’t
exactly performing well right now, so while the damage to the overall EU
economy might seem small, it comes at a bad time.
“And for manufacturing it will be much worse. And especially the German car
industry, which will suffer a big drop in exports when many firms are already
struggling.”
The economic impact on the EU could be lessened by higher US fees on imports
from rival markets. On Thursday, Trump announced that from 4 March he would go
ahead with 25% levies on goods from Mexico and Canada and double the
supplementary tariff on Chinese products to 20%.
Canada and Mexico had understood that commitments made earlier this month to
help secure their borders with the US had meant they would avoid Trump’s
threats of extra tariffs.
Hinz said he would be re-running the simulation exercise to take the new
measures into account, but it was already clear that US consumers would be
among the biggest losers."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
