Bundesbank’s Nagel: US tariffs threaten to undermine EU progress on inflation control

Bundesbank President Joachim Nagel has warned that Donald Trump's new import tariffs risk destabilizing the global economy. He argued that such protectionist measures would harm all nations by slowing worldwide growth and fueling inflationary pressures.

Nagel warned that new trade barriers could undermine the European Central Bank's (ECB) progress in controlling inflation. These protectionist measures may also compel the ECB to reassess its monetary policy stance. Given these risks, some Governing Council members are reportedly reconsidering the pace of future rate cuts.

ECB Governing Council member Yannis Stournaras estimates the new tariffs could reduce eurozone GDP growth by 0.3-0.4 percentage points. Nevertheless, he maintains an optimistic outlook, expecting inflation to continue its downward trend. Stournaras emphasized that these trade measures should not hinder further ECB rate reductions.