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Trade Tensions Threaten Economic Stability
2025-03-17 17:55:11
Economy

Trade Tensions Threaten Economic Stability

Image courtesy of : AFP (NICOLAS TUCAT)

The escalating trade conflict between the United States and the European Union poses significant risks to both economies. President Trump's aggressive tariffs have already led to substantial losses for major companies, raising concerns of a looming recession in the US.

Analysts suggest the probability of economic downturn is alarmingly high, while the EU prepares retaliatory measures that could affect billions in trade. Belgian industries are particularly vulnerable, facing potential declines in their trade surplus with the US.

The transatlantic economic relationship is deeply intertwined, encompassing more than just goods; it includes vast investments and services. As tariffs escalate, the American Chamber of Commerce warns that the repercussions extend far beyond mere trade disputes, impacting overall economic stability.

The situation remains precarious, with both sides weighing the consequences of their protectionist policies, signaling a turbulent road ahead for global commerce.

Related news on that topic:

Impact of Trade Conflicts on Global Economies

The global economic landscape is facing significant challenges, primarily due to ongoing trade conflicts and geopolitical tensions. The Organization for Economic Co-operation and Development (OECD) has lowered its growth forecasts for several key economies, including Germany, the USA, Mexico, and Canada. Germany's economic growth is now projected at a mere 0.4% in 2025, highlighting the impact on consumer spending and investment. The trade tensions, largely fueled by U.S. protectionist policies, have created a ripple effect across global markets. These policies, including tariffs on imports from countries like Mexico, Canada, and China, are exacerbating economic uncertainties. The OECD warns of potential inflationary pressures as countries respond with countermeasures, further straining the global economy. In Germany, the Ifo Institute has revised its growth forecast to just 0.2% for the current year, citing weak demand, political uncertainties, and international competitive pressures. Despite potential boosts from proposed investment packages in sectors like infrastructure and climate neutrality, the economic outlook remains cautious. While some European countries like Spain are expected to fare better, the overall sentiment is one of caution. The OECD emphasizes the need for structural reforms and international cooperation to mitigate the adverse effects of these trade conflicts. Without addressing these concerns, the global economy may continue to face stagnation and slow growth, with inflationary risks looming.

Economic Turmoil Under Trump's Leadership

The ongoing trade dispute between the United States and the European Union is escalating, with significant implications for global markets. President Donald Trump's imposition of tariffs on steel and aluminum is expected to impact European exports worth 26 billion euros. Critics, including ECB President Christine Lagarde, warn that these policies are detrimental not only to international relations but also to the U.S. economy itself. Market volatility is rampant, as investors grapple with the uncertainty surrounding Trump's unpredictable behavior and economic strategies. This instability is evident in the stark performance differences between European and U.S. stock markets. The fallout from Trump's tariffs extends to various sectors, including the wine industry in France, which faces existential threats as major companies like LVMH feel the pressure. Consumer sentiment continues to deteriorate, with fears of rising prices and inflation challenging the Federal Reserve's strategies. Many Americans perceive Trump's economic decisions as erratic, leading to a climate of anxiety and skepticism about the nation's financial future.

Read 7 more recent news on this topic

The press radar on this topic:

ziare
17. März 2025 um 01:20

US, closer to recession after Trump's tariff tantrum, EU sharpens its tools for a commercial war

Politics
Economy
The US economy teeters on recession as trade tensions escalate. President Trump's tariffs have caused significant losses for companies like Tesla Inc and Harley-Davidson, while Liberty Galati has entered concordat due to declining revenues. Economists such as Lawrence Summers and Goldman Sachs predict a 20-50% chance of recession. The EU's retaliatory measures could impact $26 billion in trade, with former Treasury Secretary Summers warning of severe economic consequences.
knack
17. März 2025 um 11:14

Trump's Aggressive Tariff Policy: Are There Also Positive Economic Consequences for Belgium?

Economy
Politics
Environment
Trump's tariffs threaten Belgium's trade surplus with the US. Industries like Solvay and UCB may suffer significant losses, while a potential recession looms due to protectionist measures. Investments in the defensie-industrie could boost economic activity, but budgettaire constraints pose a challenge. The EU-India free trade agreement may benefit Belgian exports, however.
Der Spiegel
17. März 2025 um 08:04

US Chamber of Commerce sees trillion-dollar business with EU endangered due to trade dispute

Politics
Economy
The economic ties between the US and Europe encompass much more than just the exchange of goods. The US Chamber of Commerce in the EU therefore warns of the far-reaching consequences of a trade dispute.
DER SPIEGEL
17. März 2025 um 08:04

US Chamber of Commerce sees trillion-dollar business with the EU endangered due to trade dispute - DER SPIEGEL

Economy
Finance
Politics
Transatlantic economic relations encompass trade, investment and subsidiaries; trade dispute endangers $9.5 trillion annually; the US has a trade deficit, but surpluses in trade in services; AmCham members include Apple, ExxonMobil, Visa.
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