The European Central Bank cut its main interest rate by a quarter point on Thursday, citing rising trade tensions following U.S. President Donald Trump’s sweeping tariff campaign. The decision brings the rate down to 2.25 percent, marking the ECB’s seventh cut in the past year.
In a statement, the bank said eurozone economies had built some resilience against global shocks, but the outlook for growth had worsened. Trade friction, it said, was now a defining risk.
ECB President Christine Lagarde told reporters the effects were already visible. Business investment was slowing, she said, and consumers were growing cautious. “Disruptions to international commerce, financial market tensions and geopolitical uncertainty are weighing on business investment,” Lagarde said. “As consumers become more cautious about the future, they may pull back on spending.”
Trump’s tariff policy, announced on April 2, has sparked a broader trade war with retaliatory threats from Europe and Asia. Economists warn the fallout may ripple through global supply chains.
Yael Selfin, chief economist at KPMG, said trade disruptions could lead to a glut of manufactured goods and potential deflation. “The outfall of the trade disruptions could create a global glut of manufactured goods,” she said. “That could push prices into deflationary territory this year.”
While the ECB has moved to protect the eurozone economy, the U.S. Federal Reserve has taken a different approach. At its most recent policy meeting in March, the Fed held interest rates steady. Chair Jerome Powell signalled that uncertainty from Trump’s tariffs may keep rates unchanged for the foreseeable future.
Speaking in Chicago on Wednesday, Powell offered his strongest remarks yet. “These are very fundamental policy changes,” he said, warning that the tariffs could drag on growth.
Trump reacted swiftly. On social media, he criticised Powell’s decision to hold rates and called the Fed’s latest report a “complete mess.” He added, “Powell’s termination cannot come fast enough.”
Lagarde responded with calm defiance. “I have a lot of respect for my esteemed colleague and friend Jay Powell,” she said at her press conference. She also underscored the ECB’s independence, warning against political interference in monetary policy.
“For us, here, the independence of central banks is fundamental,” Lagarde said. “Any country that wants to join the eurozone must prove it can uphold that independence in law and in practice.”
German Defence Minister Boris Pistorius has said Donald Trump did not intentionally betray Europe, but rather overestimated his power and misjudged his role during talks with Vladimir Putin.
Once seen as an unshakeable pillar of liberal democracy, free speech in Europe is facing increasing scrutiny and constraints.
Germany and Italy say Europe is still focused on ending the war in Ukraine — not on sending soldiers.
As European NATO countries rush to strengthen their armed forces, large pension bills threaten to divert funds from urgently needed military hardware.
Foreign Secretary heads to EU Foreign Ministers meeting to highlight the need for a new, ambitious security relationship. David Lammy will attend attends high-level Gymnich EU talks in Poland.
Start your day informed with AnewZ Morning Brief: here are the top news stories for May 22th, covering the latest developments you need to know.
An international conference titled “Return to Western Azerbaijan as an Essential Condition for the Supremacy of Human Rights” convened this week in Ankara, Türkiye, bringing together over 250 participants from Azerbaijan and Türkiye.
North Korean leader Kim Jong Un has publicly condemned a serious accident involving the launch of a new 5,000-ton destroyer as a “criminal act” rooted in “absolute carelessness,” marking a rare and unusually candid acknowledgment of failure by Pyongyang’s leadership.
A delegation led by Yalchin Rafiyev, Deputy Minister of Foreign Affairs of the Republic of Azerbaijan and Chief Negotiator of COP29, participated in Climate Week in Panama, held from May 19–21, 2025, in Panama City.
Tensions flare in the India-France Rafale deal as France refuses to share the fighter jet’s source code, limiting India’s ability to integrate indigenous weapons and reducing its combat autonomy.
Ukrainian President Volodymyr Zelenskyy met Turkish President Recep Tayyip Erdogan in Ankara on May 15, with discussions reportedly focusing on upcoming peace talks between Ukrainian and Russian delegates in Istanbul.
France has rejected India’s request to share source codes needed to integrate indigenous weapons into Rafale fighter jets. Despite repeated appeals, French manufacturer Dassault Aviation has refused to compromise on the issue
Ukrainian and Russian delegations meet behind closed doors at Istanbul’s Dolmabahçe Palace at 10:00 local time today to explore security guarantees, territorial integrity and a possible ceasefire.
AnewZ and Kazakhstan’s Jibek Joly/Silk Way TV channel co-hosted a special AnewZ Talks in Astana at Maqsut Narikbayev University (MNU), uniting global experts and young leaders at Silk Road Media Group’s journalism school to explore the growing intersection of media and diplomacy.
The U.S. government's decision in April 2025 to impose stricter export controls on advanced semiconductors has delivered a significant blow to Nvidia, compelling the company to obtain licenses for sales of its H20 AI chips to China—one of its largest and most strategically important markets.
Chinese EV maker BYD has unveiled its budget-friendly Dolphin Surf in Berlin, intensifying competition in Europe's electric car market with prices starting at just €19,990.
The European Union aims to introduce a €2 handling fee on low-value online shopping packages entering the bloc, targeting billions of cheap goods from platforms like Shein and Temu. The move seeks to cover the high costs of customs compliance and safety checks.
The German Council of Economic Experts has lowered its forecast for Germany’s economy, now expecting stagnation in 2025 amid industrial challenges and ongoing impacts from U.S. tariffs, while modest growth is anticipated to resume in 2026 thanks to a major fiscal stimulus plan.
Marks and Spencer (M&S) has revealed it could lose up to £300 million in trading profits following last month’s ransomware attack, with operational disruptions expected to continue for months.
Start your day informed with AnewZ Morning Brief: here are the top news stories for May 22th, covering the latest developments you need to know.
An international conference titled “Return to Western Azerbaijan as an Essential Condition for the Supremacy of Human Rights” convened this week in Ankara, Türkiye, bringing together over 250 participants from Azerbaijan and Türkiye.
North Korean leader Kim Jong Un has publicly condemned a serious accident involving the launch of a new 5,000-ton destroyer as a “criminal act” rooted in “absolute carelessness,” marking a rare and unusually candid acknowledgment of failure by Pyongyang’s leadership.
A delegation led by Yalchin Rafiyev, Deputy Minister of Foreign Affairs of the Republic of Azerbaijan and Chief Negotiator of COP29, participated in Climate Week in Panama, held from May 19–21, 2025, in Panama City.
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