Francois Villeroy de Galhau, the chief of France's central bank, criticized the Trump administration for destabilizing the multilateral economic system, negatively impacting both the U.S. and European economies.

Villeroy highlighted that the U.S. Federal Reserve's recent downgrade of economic forecasts indicates that Trump's policies are negatively affecting the American economy.

He also informed French lawmakers that Trump's decisions and policy reversals, particularly in trade, contribute to long-term financial risks, including those associated with crypto-assets and environmental issues.

Since taking office, Trump has made significant policy changes, including job cuts in federal agencies and unexpected tariff shifts that led to a 1.8% decline in the U.S. stock market.

In response to ongoing trade tensions, Trump threatened to impose a 200% tariff on European alcohol imports, escalating disputes in the trade war.

Although the tariffs would have a lesser impact on Europe, Villeroy estimated a potential 0.3% reduction in the eurozone's economic output due to increased U.S. tariffs in the second quarter.

Despite the economic instability caused by the Trump administration, both Villeroy and Nagel suggested that Europe could leverage this situation to strengthen its economy and attract foreign investment.

Villeroy emphasized that the situation represents a significant shock to the global economy, particularly for the U.S.

During a meeting in Paris, Villeroy described Trump's economic policies as a tragedy for the American economy, noting that the economic shock has been more severe than anticipated following the presidential election.

German central bank chief Joachim Nagel echoed these sentiments, likening the current U.S. economic policy under Trump to a horror show, reflecting widespread concern among European leaders.