ECB Survey Reveals Eurozone Households Slashing Spending Following Trump Tariff Shockwaves

Eurozone wallets snap shut as Trump's tariff hammer drops.

Spending Freeze Grips Continent

European Central Bank data confirms households across the eurozone are cutting discretionary spending to the bone. The sudden contraction follows renewed trade barriers that sent import costs soaring.

Budget Chains Tighten

From Berlin to Barcelona, families are postponing major purchases and scaling back on non-essentials. The ECB's latest survey shows consumer confidence plummeting as tariff impacts ripple through supply chains.

Traditional finance experts scramble to explain the velocity of the pullback—apparently forgetting that trade wars actually have casualties. Meanwhile, cryptocurrency markets continue operating 24/7 with zero import duties on digital asset transfers.

Consumers in the Eurozone brace for higher inflation and slower growth

People who believe the tariffs will fuel inflation have already raised their own forecasts. The survey shows that, compared to January 2025, those individuals now expect inflation to be 0.2 percentage points higher one year out.

Their three-year forecast went up 0.13 points, and even their five-year expectations rose by 0.06. That’s a lot for long-term inflation, which usually doesn’t MOVE much. It shows they think this situation isn’t going away fast.

On growth, it’s the same story. People who see the tariffs as recession triggers cut their 12-month growth expectations by 0.4 percentage points. That’s double the cut seen from people who don’t think the tariffs will hurt the economy.

The ECB says this split shows a clear divide between people who are feeling the pressure and those who aren’t. But either way, the mood is cautious.

Spending drops and consumers ditch U.S. goods

The reaction isn’t just in forecasts, it’s in wallets. 26% of survey respondents said they’ve already stopped buying American products. 16% said they’ve reduced their overall spending since the tariffs were announced.

Richer households are more likely to skip U.S. goods, while lower-income families are tightening up across the board. What’s driving that divide? Financial literacy. People who understand economics more deeply are the ones switching brands. Those with less understanding are just buying less of everything.

A big chunk of the spending cuts is hitting non-essential items. The ECB says spending on basic needs, like food and rent, hasn’t changed much. But anything extra? That’s where the squeeze is. When comparing January to April 2025, households that changed their habits after the tariffs slashed their spending more than others. All the damage hit discretionary expenses.

Mislav Matejka, strategist at JPMorgan Chase, said this slowdown might not last. “The potential turn up in earnings and buybacks could be one of the supports for the more positive Eurozone stance entering next year, once the current consolidation runs its course,” Matejka wrote in a note to investors. The Eurozone stock market, tracked by the Stoxx 600, is up 9% this year, but that’s still behind the S&P 500’s 13% rise. Profits in the Eurozone are already down 1% this year.

Consensus expects Stoxx 600 earnings-per-share to climb 11% in 2026, according to data compiled by Bloomberg Intelligence. S&P 500 profits are expected to grow about 14% next year, the data show.

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