What impact will new US tariffs have on the wallets of people in Europe?
The 20% tariffs imposed by the Trump administration on European products could drive down prices on the continent.
READ MORE : http://www.euronews.com/2025/04/04/what-impact-will-new-us-tariffs-have-on-the-wallets-of-people-in-europe
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The 20% tariffs imposed by the Trump administration on European products could drive down prices on the continent.
READ MORE : http://www.euronews.com/2025/04/04/what-impact-will-new-us-tariffs-have-on-the-wallets-of-people-in-europe
Subscribe to our channel. Euronews is available on Dailymotion in 12 languages
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00:00What impact will U.S. tariffs have on Europeans' wallets?
00:11The introduction of 20% tariffs on European products could lead to deflation or lower
00:16prices in Europe.
00:18This would be caused by an increase in supply from China, but also within the European Union.
00:25One of the factors through which the EU will experience lower prices will be, of course,
00:30exports from countries like China now being redirected to Europe.
00:33The second factor why Europe will experience potentially slightly lower prices is that
00:37some exports that would go to the U.S. are now staying in the market.
00:40For instance, if you now have high tariffs on Italian wine, for instance, more of this
00:46wine will end up in the single market, and therefore the prices for these goods will
00:49decrease.
00:51At first glance, a sustained fall in prices would appear to be beneficial for European
00:55consumption and therefore for growth.
00:58But in reality, households are likely to postpone large investments when they see prices falling
01:03to get the best possible deals.
01:06Meanwhile, businesses see lower profits and may reduce their own investments or even lay
01:10people off.
01:12For this researcher, current uncertainty is the biggest risk to the economy.
01:16These tariffs are across the board.
01:18So all products Europe exports to America will be affected.
01:22So think of machines, chemicals, cars, of course.
01:27These companies will now maybe face a burden, and they might not invest in Europe.
01:32I think that's the biggest risk.
01:34The uncertainty, what will come, means companies don't invest, and that might have a very negative
01:39effect in a few months or years on jobs and growth, and that I think many people will
01:46But economists have no crystal ball, and there are many unknown factors that make forecasting
01:51difficult.
01:52China's reaction and that of the European Union will weigh heavily in the balance.
01:57U.S. President Donald Trump could also use tariffs as leverage in other negotiations.