EU Predicts Significant Impact on U.S. GDP from Trade Tariffs

European Trade Commissioner Valdis Dombrovskis revealed on Friday that new projections indicate the United States' gross domestic product (GDP) could decrease by 0.8% to 1.4% by 2027 as a direct consequence of trade tariffs. The European Union's GDP is also expected to see a slight reduction of 0.2%.

Potential Escalation and Global Consequences

Should these measures become permanent or the trade war intensify, the EU anticipates more severe outcomes: a 3.1% to 3.3% contraction in the U.S. economy, a 0.5% to 0.6% decline in the Eurozone, and a 1.2% drop in the global economy within three years. Global trade could plummet by 7.7%.

Dombrovskis highlighted that these models do not account for the potential loss of investor and business confidence in the U.S., which could further worsen these estimates. "Europe neither initiated nor desires this confrontation. Tariffs contradict the political and economic rationale behind our deep, longstanding transatlantic trading partnership, valued at €1.6 trillion in 2023," he emphasized.