EU remains concerned about economic contraction despite ‘levy pause’

WARSAW (ANP) – Trump announced specific “reciprocal” tariffs for many trading partners last week, in addition to a 10 percent tariff for all countries. Last Wednesday, he suspended those special import tariffs, which amount to 20 percent for the EU, for ninety days.

If Trump proceeds with his high tariffs of 20 percent on all EU goods and much higher rates for many other countries, the size of the economy will shrink by 0.6 percent in the EU, by at least 3.1 percent in the US, and by 7 percent globally over the next three years, said Dombrovskis. This is evident from simulations by the European Commission.

If Trump keeps it at a 10 percent increase, the US economy will decline by 0.8 to 1.4 percent by 2027. The economy in the EU will then decrease by 0.2 percent and globally by 1.2 percent.

The simulations did not take into account an additional loss of confidence from investors and businesses in the US economy, Dombrovskis noted. According to him, this could have further negative economic consequences.

“Europe did not start this confrontation and Europe does not want this confrontation,” Dombrovskis reiterated. “We are willing to negotiate a mutually acceptable outcome. The EU simultaneously defends its economic interests.”

(April 11, 2025)