German ECB Governing Council member Joachim Nagel acknowledged today that Germany faces significant downside risks to growth due to US tariffs.
“As far as economic growth is concerned, which of course also depends on the level of the respective tariffs, the impact in Europe will also be significant for Germany,” he warned.
But on inflation, “we are relatively certain that the impact on inflation in the US will be stronger than in the euro zone,” Nagel added.
Separately, ECB Chief Economist Philip Lane told Bloomberg News that while the tariff shock will likely drag on Eurozone growth, the region is not on an automatic path toward recession.
Lane emphasized the bloc’s diversified trade relationships beyond the US, which could act as a cushion against a more severe downturn.
