Merz warns of ‘dramatic’ impact of US tariffs on German economy

This article discusses the impact of Donald Trump's trade war on European markets, with significant losses seen in Germany, France, and Poland. The EU is planning retaliation measures and seeking negotiations to soften the blow on the economy, with the possibility of ECB rate cuts and fiscal support. Additionally, central Europe is facing border closures due to a foot-and-mouth disease outbreak, prompting countries like Hungary, Slovakia, and Austria to take preventive measures. Full Article

Donald Trump's decision to impose varying tariff rates on countries has created uncertainty for exporters to the US. Companies may attempt to exploit differences in tariffs by reshuffling supply chains, but the complexity and unpredictability of enforcement pose challenges. Rules of origin are crucial in determining tariff rates, with exporters needing to prove the source of their goods to benefit from lower rates. However, navigating these rules and potentially shifting production to lower-tariff countries may...

President Trump's senior counsellor for trade and manufacturing advocates for the implementation of reciprocal tariffs to address the biased international trade system that has led to a $1tn annual trade deficit for the US, primarily due to the World Trade Organization's "most favoured nation" rule. The US has lost millions of manufacturing jobs since 1979, while facing higher tariffs and non-tariff barriers from major trading partners. Trump's doctrine aims to hold foreign countries accountable by...

Investors and economists believe the ECB is highly likely to cut borrowing costs next week and again in June due to the risk of recession posed by Donald Trump's tariffs, with a 90% chance of a quarter-point cut in interest rates in April. The looming trade war is expected to create significant deflationary pressures in the euro area, leading to multiple rate reductions and potentially necessitating the use of larger stimulus measures such as liquidity...

EU trade commissioner Maros Šefčovič offered the US a zero-tariff deal on cars and industrial goods, including pharmaceutical products and machinery, before the trade war initiated by Donald Trump. This proposal was made in a meeting with US commerce secretary Howard Lutnick on 19 February. The EU remains open to negotiations but will not hesitate to defend itself if necessary. Full Article

The European Union is open to discussing import tariffs with the Trump administration, with European Commission president Ursula von der Leyen stating that Brussels is prepared to implement countermeasures if needed. Short-dated yields in the Euro-area dropped to a two-and-a-half-year low amid concerns over the economic impact of US tariffs, prompting a sell-off in stocks and increased speculation of European Central Bank rate cuts. European markets suffered losses as President Trump suggested that tough measures...