Greek central bank governor Yannis Stournaras warned in an interview with the Financial Times on Monday that US President Donald Trump’s new tariff measures could slow euro area economic growth by between 0.5 and 1 percentage point.
His comments come as EU nations consider targeted countermeasures on up to $28 billion of US imports - from items like dental floss to diamonds.
The 27-member bloc currently faces a 25% tariff on steel, aluminum, and cars, along with “reciprocal” tariffs of 20% on nearly all other goods, effective from Wednesday. Stournaras cautioned that the emerging global trade war might trigger a significant “negative demand shock” in the eurozone, potentially weakening economic activity and pushing inflation below central bank targets.
He explained, “A notable adverse impact on growth could lead to activity being much weaker than expected, dragging inflation below our targets.” The European Central Bank has estimated that a blanket 25% US tariff on European imports would reduce eurozone growth by 0.3 percentage points in the first year, a figure that could rise to half a percentage point if the EU enacts its own counter-tariffs.
Stournaras described the tariffs as deflationary measures and noted that some of the US actions have been “worse than expected,” contributing to an “unprecedented” degree of global policy uncertainty. With the next ECB rate decision set for April 17 and eurozone inflation easing to 2.2% in March from 2.3% in February, there is growing speculation about further interest rate cuts.
Trade between the US and the EU remains robust, with 2024 figures showing US imports from the EU at 334 billion euros, compared to 532 billion euros in EU exports to the United States. On April 2, Trump announced a 10% baseline tariff on all US imports along with higher duties on goods from roughly 60 countries, intensifying the trade dispute.
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A widespread wildfire erupted on the popular tourist destination of Crete on Wednesday, threatening homes and forcing the evacuation of residents and tourists from at least four settlements.
Greek Prime Minister Kyriakos Mitsotakis is expected to reshuffle his cabinet in the coming days, five government officials told Reuters on Thursday, following mass protests that erupted across the country over a deadly 2023 train crash.
The 79th edition of the Cannes Film Festival has officially opened on the French Riviera, once again transforming Cannes into the global centre of cinema, fashion, and entertainment.
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The Iranian President Masoud Pezeshkian has instructed his first deputy to fulfill the public’s expectations regarding the access to the Internet services and platforms amid a wartime shut-down of international connection since late February.
U.S. President Donald Trump said he does not think he will need China's help to end the war with Iran as he left for a high-stakes summit in Beijing on Tuesday, as hopes for a lasting peace deal dwindled and Tehran tightened its grip over the Strait of Hormuz.
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By the time American shoppers began noticing higher prices on everything from trainers to televisions, the world's two largest economies were already deep in a trade war that left the world wondering how it would end.
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