Euro News (EUR)

The US President Donald Trump has unveiled sweeping new tariffs set to take effect next week, prompting the European Union to evaluate potential retaliatory trade measures. Since Donald Trump's first term, the EU has created a robust toolbox to counter his unconventional trade policies.

French newspaper Le Figaro has published an article revealing troubles the European business community is facing due to measures taken by the new administration of the US. The journalists noted that French companies were forced to urgently adapt to the situation and reconsider their strategies.

Tariffs of 20% on European exports to the US are likely to lead to a significant decline in the growth rate of the German economy. Meanwhile, the impact on inflation will be more difficult to assess, said Fritzi Köhler-Geib, member of the Bundesbank's Executive Board.

Former head of the European Central Bank Mario Draghi views the German government's decision to increase defense spending as a ‘game changer.’ However, he warns that there are certain risks associated with the implementation of this plan.

Donald Trump's return to power has spurred calls for loosening of banking regulation in the EU, as creditors in the eurozone have often criticized the strict regulatory environment. However, the region's supervisors should remain cautious, said Patrick Montagner from the ECB.

ECB Governing Council member Francois Villeroy de Galhau confirmed the central bank maintains policy space for additional interest rate reductions, though the pace and extent of future cuts remain undetermined.

French manufacturing activity showed a moderate recovery in March, with the Purchasing Managers' Index (PMI) improving more than analysts had anticipated. Nevertheless, this growth has not yet offset the ongoing political tensions in the country, as reported by Bloomberg.

Holger Schmieding, of Berenberg Bank, noted that the risks of escalating trade tensions with the US pose a threat to the export-oriented EU economy. Business faces uncertainty and finds it difficult to plan investments. Despite positive developments, existing problems need to be addressed.

According to Jose Luis Escriva, a member of the European Central Bank (ECB) Governing Council and Bank of Spain governor, at this point it is extremely difficult to determine which exact inflation risks prevail in Europe. The official stated this at a conference organized by Caixaforum in Madrid.

A bold move by incoming German Chancellor Friedrich Merz to relax long-standing restrictions on government spending has drawn international acclaim, but sparked domestic backlash. This was reported by Reuters.