EU Predicts US GDP Drop Due to Trade Tariffs

European Trade Commissioner Valdis Dombrovskis revealed on Friday that the United States' gross domestic product (GDP) is projected to decrease by 0.8% to 1.4% by 2027, attributing this decline to the impact of trade tariffs. The European Union's GDP is also expected to see a slight reduction of 0.2%.

Potential Long-term Impacts

Should these trade measures become permanent or if the trade war intensifies, the EU forecasts a more severe contraction: the US economy could shrink by 3.1% to 3.3%, the Eurozone by 0.5% to 0.6%, and the global economy by 1.2% over three years, with a 7.7% decline in global trade.

Additional Factors Not Considered

Dombrovskis pointed out that the current models do not account for the potential loss of investor and business confidence in the US, which could further worsen these estimates. "Europe did not start this confrontation and does not desire it. Tariffs contradict the political and economic rationale behind our long-standing transatlantic trading partnership, valued at €1.6 trillion in 2023," he emphasized.