Warsaw (Reuters)-With the highest US fees postponed for 90 days, European Union Finance Ministers promised Union on Friday to negotiate a trade agreement with Washington during this period, noting that US rates are more harmful to their own economy than to Europe.
US President Donald Trump said on Wednesday he was suspending 20% reciprocal tariffs that had imposed on Europe from that day, although his 10% rate remains in force, as with most other countries around the world.
“All finance ministers have agreed with the need for a unified stance,” the president of negotiations said Paschal Owner, at a press conference, amid meetings of the EU finance ministers in Warsaw for conversation for the first time since the announcement of tariffs.
EU economic commissioner Valdis Dombrovskis told reporters that the commission estimated the negative impact of US tariffs on the European economy by 0.2% of GDP by 2027 if the measures are only temporary and there is no retaliation.
However, if companies begin to consider the highest rates as permanent, or if there are more retaliation, European economic growth could lose 0.5% to 0.6% of GDP by 2027, he said.
At the same time, the US economy itself would reduce 0.8% to 1.4% by 2027 in the benign scenario and 3.1% to 3.3% in a scenario of permanent tariffs and more retaliation.
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“These model simulations do not take into account an additional loss of trust from investors and companies in the US economy, which would increase the negative impact on GDP,” said Dombrovskis.
He said that, on the other hand, the increase in investment in Germany, which reformed his debt brake to spend more freely in defense and created an infrastructure fund of 500 billion euros, could provide a positive stimulus for the European economy.
Some European Central Bank officials were more pessimistic and estimated the impact of US tariffs on the EU economy between 0.5% and 1.0% of GDP, depending on the evolution of the commercial dispute. The commission predicted that the EU economy as a whole will grow 0.9% this year, so that tariffs could put the EU in recession.
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“It is very difficult to calculate the numbers now, but it is obvious that the difficulties of global trade will affect growth in the eurozone,” Owner told Bloomberg TV.
