Trump tariffs could slow euro growth by up to 1%, says Greek central banker

Comments come against the backdrop of European Union countries weighing approval of a first set of targeted countermeasures on up to $28 billion of US imports in coming days

US President Donald Trump's tariff measures could slow euro area economic growth by anywhere between 0.5 and 1 percentage points, Greek central bank governor Yannis Stournaras told the Financial Times in an interview published on Monday. 

Stournaras' comments come against the backdrop of European Union countries weighing approval of a first set of targeted countermeasures on up to $28 billion of US imports from dental floss to diamonds in the coming days. 

The 27-nation bloc faces 25 per cent import tariffs on steel and aluminium and cars and "reciprocal" tariffs of 20 per cent from Wednesday for almost all other goods. 

In an interview with the newspaper, Stournaras warned that the looming global trade war risk sparking a large "negative demand shock" in the Eurozone that could weigh heavily on Europe's economic growth. 

"A notable adverse impact on growth could lead to activity being much weaker than expected, dragging inflation below our targets," he told the FT. 

The European Central Bank has estimated that a blanket US tariff of 25 per cent on European imports would lower euro zone growth by 0.3 percentage points in the first year. EU counter-tariffs on the US would raise this to half a percentage point. 

Stournaras said that tariffs were a deflationary measure and some of the US steps were "worse than expected" creating an 'unprecedented' degree of 'global policy uncertainty', the FT reported. 

The next ECB rate decision is due on April 17. Euro zone inflation eased to 2.2 per cent in March from 2.3 per cent in February, bolstering the case for another European Central Bank interest rate cut later this month. 

US goods imports into the EU totalled 334 billion euros ($365.6 billion) in 2024, against 532 billion euros of EU exports to the United States. 

On April 2, Trump unveiled a 10 per cent baseline tariff on all imports to the US along with higher duties on dozens of other countries. The tariffs appeared to target about 60 countries. 

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