Trade Tensions at the Economic Outlook

At the Economic Outlook, Christine Lagarde, the president of the European Central Bank stated that banks and policymakers alike are grappling with “exceptionally high” uncertainty, in regards to high trade tensions and geopolitical shifts resulting from the actions of the Trump administration. These tensions and shifts are due to the Trump administration's unpredictable tariffs, military spending, and alliances. These actions have caused European countries to take defensive actions, the European Commission announced tariffs on US imports alongside Canada in addition to increased proposals by European officials to borrow more funds to increase military spending. Additionally, at the Economic Outlook among many of the ECB officials, there was a bewildered mood, reflections of rapidly shifting economic environments steaming from these trade tensions, their bewilderment indicating how volatile and unpredictable things have become for the future. However, under different circumstances the outlook would have celebrated an impressive achievement, inflation for the eurozone slowed to 2.4% in February and policymakers have cut interest rates size times since the middle of last year.

https://www.nytimes.com/2025/03/12/business/economy/economy-uncertainty-tariffs-europe.html