ECB Warns US Tariffs Could Stall Eurozone Growth for Years

Luis de Guindos, Vice President of the European Central Bank, issued a stark warning on June 16 in Frankfurt: US tariffs threaten to hamper Eurozone growth for years. The remarks, reported by Reuters, come amid a delicate balancing act for the ECB as it navigates inflation risks and currency fluctuations.

Despite the euro''s appreciation and falling oil prices potentially dragging inflation below the 2% target, de Guindos remains unperturbed. "The risk of undershooting is very limited in my view," he stated, emphasizing the ECB''s assessment that inflation risks remain balanced. Temporary dips to 1.4% by early 2026 won''t derail medium-term stability, thanks to tight labor markets and steady 3% wage growth.

The ECB has paused its rate-cutting cycle after months of easing, with markets pricing in just one more reduction this year. "Markets have understood perfectly well what the President said about being in a good position," de Guindos noted, referencing Christine Lagarde''s recent communications.