Euro Area: US Tariffs Trigger 0.1% Inflation Drop & Weaker Growth

ECB finds that a 1% fall in euro area exports to the US due to higher tariffs lowers inflation and weakens growth over time.

After about 1.5 years, the consumer price level is nearly 0.1% lower, despite an initial small price rise.

Study covers 20 euro area countries, 192 trading partners, using data from 2002–2019.

Industrial production declines over 12 months before stabilising.

Around 60% of sectors, accounting for 50% of output and exports to the US, are highly sensitive to monetary policy easing.