pt.euronews.com
US Tariff Threats to Slash Eurozone Growth
New US tariff threats could significantly hurt the already weak European economy, reducing GDP growth to 0.7% in 2025 according to Goldman Sachs, impacting sectors like machinery, pharmaceuticals, and autos; the EU plans firm retaliation, adding further uncertainty.
- How might a weaker Euro affect European stocks and what are the complexities involved?
- This economic uncertainty stems from US President Donald Trump's potential tariff threats against the EU, despite the EU's absence from the initial round of tariffs. The uncertainty impacts investment intentions, and key sectors like machinery, pharmaceuticals, chemicals, automotive, and technology face significant risks. The impact may be softened by a weaker Euro but the relationship is complex due to risk premium increases.
- What is the potential scope and nature of the EU's retaliatory strategy, and how will this further impact the Eurozone economy?
- The EU's response to potential US tariffs remains uncertain, although the European Commission has pledged a firm retaliation. The JPMorgan forecasts a 0.5 percentage point drag on annualized growth over the next four quarters due to trade policy uncertainty, further compounded by the weak Eurozone growth. The meeting between US Treasury Secretary and the ECB President highlights the growing concern over US-EU trade tensions.
- What is the immediate economic impact of the potential US tariffs on the Eurozone, and what specific sectors are most vulnerable?
- The potential imposition of US tariffs on European imports could significantly harm the Eurozone economy, reducing GDP growth and corporate profits. Goldman Sachs projects a 0.7% GDP growth in 2025, far below the consensus estimate, while corporate earnings growth is forecast at only 3%. A 10% tariff with full retaliation could slash a percentage point from Eurozone growth.
Cognitive Concepts
Framing Bias
The headline and introduction immediately establish a negative tone, focusing on the potential economic downturn in Europe due to US tariffs. The sequencing of information prioritizes the negative predictions of Goldman Sachs and JPMorgan, placing these perspectives prominently. While other viewpoints are presented later, the initial framing strongly influences the overall narrative.
Language Bias
The article uses terms such as "uncertainty," "weak," "pressure," and "eliminate." While not explicitly loaded, these words consistently contribute to a negative and pessimistic tone, reinforcing the negative consequences of tariffs. More neutral phrasing could be used, for example, instead of 'eliminate' one could use 'reduce'.
Bias by Omission
The analysis focuses heavily on the potential negative impacts of tariffs on the European economy, quoting sources like Goldman Sachs and JPMorgan. However, it omits perspectives from US economists or officials who might offer counterarguments or justifications for the potential tariffs. The article also doesn't explore potential benefits of tariffs for the US economy, or alternative solutions to trade disputes. While acknowledging space constraints is reasonable, these omissions limit the article's ability to offer a fully balanced perspective.
False Dichotomy
The article presents a somewhat simplified view of the situation, focusing primarily on the negative consequences of tariffs for Europe. While acknowledging that a weaker Euro might offer some relief, it doesn't delve into the complex interplay of factors influencing currency exchange rates or the potential for other economic factors to mitigate the impact of tariffs. The focus is largely on an 'eitheor' scenario: tariffs cause harm or a weaker Euro might partially offset it.
Sustainable Development Goals
The article discusses potential negative impacts of US tariffs on the European economy, including decreased GDP growth and reduced corporate profits. This directly affects decent work and economic growth by potentially leading to job losses, reduced investment, and slower economic expansion.