Europe has been given some vital good news ahead of a tornado of tariffs expected to come from the US tomorrow (April 2) as US President Donald Trump declares ‘Liberation Day’. Across the Eurozone, new figures have revealed inflation fell for the second month in a row to 2.2% in March.
The news will be a welcome relief for leaders in the bloc who are battening down the hatches ahead of an expected barrage of trade levies from White House in the next 24 hours. Donald Trump has promised to roll out taxes on imports from other countries on Wednesday, which he claims will free the US from reliance on foreign goods. He said he would impose “reciprocal” tariffs to match the duties that other countries charge on US products, dubbing April 2 “Liberation Day”. Reuters reports the European Central Bank (ECB) has recorded a drop of 0.1% in inflation, but the financial institution is still likely to slow any cuts to interest rates as it waits for the effects of any US tariffs to play out in the economy.
The Financial Times reports the ECB cut rates for the sixth time in March since last summer, but that it said overall “monetary policy is becoming meaningfully less restrictive.”
ECB president Christine Lagarde warned there is “exceptionally high” uncertainty because of the potential trade war brewing between Brussels and Washington as a result of Donald Trump’s tariffs.
In the UK, the Government and businesses are waiting with bated breath for any announcement tomorrow on Wednesday from the Trump administration on what any new tariffs may look like.
Conservative Shadow Business Secretary Andrew Griffith said any US tariffs on UK exports represented the “worst failure of trade policy for a generation”.
He said: “There is that real asymmetry between the constant litany of references to the European Union, a valued trading partner of ours, but only one valued trading of powers, as I hope the Secretary of State is about to reveal over the coming days, because tomorrow we understand that tariffs will be imposed by the United States on British exporters.
“If that is the case, that would be the worst failure of trade policy for a generation. It is businesses, jobs, our economy, who are all going to be paying the price.
“The Chancellor’s emergency budget will not have lasted a single week because she made no provision for the imposition of tariffs, if that is indeed what is to come.”
Labour’s Business Secretary Jonathan Reynolds said: “We are engaged with our US counterparts. We are engaged, I think, more so than any other country in those negotiations.
“He will know I will not share the content, the detail, of those talks, but this is obviously a policy originating by the President of the United States that we are responding to and engaging with, but he will understand that comes from the mandate, from the agenda, of the US administration.”