On April 2, 2025, President Trump announced a 10% baseline tariff on all U.S. imports, which will also affect around 60 countries with increased levies.

As a result of these tariffs, EU member states will face 25% import duties on key products such as steel, aluminum, and automobiles, along with a 20% reciprocal tariff on nearly all other exports to the U.S. starting April 9, 2025.

In response, the European Union is considering retaliatory tariffs on approximately $28 billion of U.S. goods, targeting a range of products from dental floss to diamonds.

Yannis Stournaras, Governor of the Bank of Greece, warned that these escalating trade tensions could reduce Eurozone economic growth by 0.5 to 1 percentage points.

The European Central Bank (ECB) projects that a blanket U.S. tariff of 25% on European imports could lower growth by 0.3 percentage points in the first year, with EU counter-tariffs increasing this to 0.5 percentage points.

The anticipated EU retaliatory tariffs could further amplify this impact, potentially cutting growth by an additional 0.5 percentage points.

Stournaras described the tariffs as inherently deflationary, noting that U.S. actions have contributed to an unprecedented level of global policy uncertainty.

He cautioned that a decline in economic activity could hinder growth expectations and push inflation below target levels.

The ECB's next rate decision is scheduled for April 17, 2025, as eurozone inflation eased slightly to 2.2% in March 2025, down from 2.3% in February.

In 2024, the EU imported €334 billion worth of goods from the U.S. while exporting €532 billion to the American market.

Stournaras emphasized that escalating trade tensions could significantly decrease global demand, leading to a sharp slowdown in the Eurozone economy.

His comments were made in an interview with the Financial Times, highlighting the potential impact of a global trade war on the Eurozone's economy.