Trade Tariffs Spark Economic Uncertainty, Impact on Inflation Unclear
European Central Bank Vice President Luis de Guindos has cautioned that the trade tariffs recently announced by U.S. President Donald Trump could create economic uncertainty. However, the impact on inflation remains less clear.
Trump's plan to impose 25% tariffs on steel and aluminum imports into the United States marks a significant escalation in the ongoing trade dispute.
In an interview with Spanish broadcaster TVE, de Guindos expressed concern over the "situation of huge uncertainty" created by these tariffs. He warned that their implementation could lead to a "supply shock," ultimately affecting global economic growth.
Regarding the potential inflationary impact, de Guindos stated that it is "much less clear." He explained that a decline in economic activity could mitigate inflationary pressures.
De Guindos emphasized the importance of avoiding a trade war and urged Europeans to adopt a cautious approach in responding to the U.S. tariffs. He also noted that inflation in the eurozone is gradually converging towards the ECB's target of 2%.
The ECB Vice President stressed that decisions regarding future monetary policy will be made on a meeting-by-meeting basis.