ECB officials say they intend to pause rate cuts despite US tariff risks

Five senior European Central Bank (ECB) officials said that the US President's threat to impose 30% tariffs on European imports from August 1 complicates the regulator's decision-making process. However, they said this is unlikely to derail plans to pause rate cuts next week.

After its last meeting in June, the ECB signaled it was likely to keep interest rates unchanged on July 23–24. But Donald Trump's announced 30% duty surpassed the European regulator's expectations under even the most negative of the three scenarios. That means ECB officials will be forced to prepare new estimates and consider a more negative outcome. This was reported to Reuters by anonymous sources inside the ECB Governing Council.

Council members remain reluctant to act on just threats of tariffs, they said, especially given the inconsistent rhetoric from the US administration. Economists quoted by the agency mostly do not view the implementation of Donald Trump's tariff plans as likely. Such a move would hit the economy of the United States, accelerating inflation and reducing GDP growth.