The uncertainty about the American commercial tariffs costs the euro and the British economy thousands of millions this year and the next year, which cannot be fully compensated for an increase in defense spending in 2025.
According to the latest global S&P report, Economic uncertainty will reduce the economy of the eurozoneBy 14.6 billion euros, at 0.4 % of GDP between 2025 and 2026.
In its latest economic expectations, the definitions were announced by 25 % American auto imports,, S& P Global also reduced its euro -euro’s previous forecast from 1.2 % to 0.9 % by 2025 due to this uncertainty.
The chief economist in Europe, the Middle East and Africa, in Silvin, told “Euronews Business” that “the uncertainty in itself has a greater risk to the European economy than the customs tariff alone.” On the other hand, there are buds of hope in Europe. Thanks to Financial stimulation in Germany and the European UnionGDP can grow 1.4 % in 2026.
How can American customs duties harm European healing?
Prayer, stressing that his expectations can change due to unpredictable political movements, which show many scenarios that can be seen Possible definition effect In the economy of the bloc.
In the worst cases, an increase in American definitions on all European Union imports up to 25 % It will limit the growth of GDP in the eurozone At 0.5 % in 2025 and 1.2 % in 2026. In this case, the European Central Bank is expected to reduce interest rates more than once this year and raise them after experts currently expected.
Comment on the latest ads White HouseIt is 25 % on the customs tariff for everyone Cars and auto parts“Euronews Business” has already taken into account a 10 % tariff of this nature. He added that an additional 15 % will have a limited effect on the current numbers.
“Germany will be more affected The rest of the euro area, given this A greater dependence Prayer explained that German production will lead to a decrease in German production to 0.1 % in 2025, from American auto exports, about 1.5 times the European average, “adding that German production will decrease by 0.1 % in 2025.
From a more positive point of view, confidence in Europe is increasing, with the support of Low interest rates and inflationWhich translates into a continuous force of the labor market. The expected financial stimulation, especially in the defense sector, pays more confidence.
It is possible that the European Union member states will agree on a An increase in defensive spending From 1 % of GDP of 2026, which can enhance the gross domestic product of the euro area 0.1 % in 2026, 0.2 % in 2027 and 0.3 % in 2028.
The potential types of the European Central Bank rise on the horizon
since then A tariff of revenge on the European Union The mass inflation in the mass was not largely appeared at the time of completion of the report, S& P Global states that the European Central Bank reduces species again this year, up to 2.25 % in April or June.
S&P Global states that the European Central Bank Start your basic interest rate In the second semester of 2026, with striped increases, until the deposit type reaches 2.75 % at the end of next year. Wait for one Strong recovery for credit order It indicates that the financial incentive will push the economy to an unsustainable growth rate.
Buruer wrote that the risks facing current expectations include an insecurity, and the potential failure to implement tax plans and the indirect effects of the American economy if growth affects the other side of the Atlantic Ocean by increasing import prices. On the other side, programs Financial stimulation They can have a greater effect than expected Improving confidence quickly.
UK growth prospects are reduced in the middle of the road
In other economic expectations focusing on the UK, which reached before announcing the customs tariffs on cars, the S& P Global reduced their expectations about growth British economy 1.5 % to 0.8 %. Reduction to nearly half of the prediction This is explained by high inflation, weak export sizes and restriction of monetary policy. According to the Statistics Office, British GDP will grow 1.1 % in 2024.
According to Marion Amini, the chief economist in the global classifications of the American Kingdom of S&P, If the UK fails to get rid of definitions From 25 % was recently announced on car exports to the United States, GDP can be affected by 0.2 %. Export cars to the United States The largest commercial surplus source “The dualism of goods for the United Kingdom,” he said.
Uncertainty about trade and weak demand in Europe and China and the strong value of the pound They are limited to the country’s exportsWhich contributed 31 % of the national GDP in 2024. The weak export growth is also due to the high costs of employment and energy of companies.
propagandaThe United Kingdom is the fourth largest defense exporter in Europe
“Energy prices are still twice It is before the energy crisis, so there are many things that must be absorbed. “Amiot explains to” Euronews Business “.
The part that the demand can be expected to accelerate is the defense defense. The United Kingdom is the fourth largest defense exporter in EuropeTherefore, it can benefit from the increase in military spending in the European Union in the coming years.
“It is not quite clear how the association will be in the future, but it seems that there is a will to cooperate in defense, although we have seen that Part of the European Union spending may exclude British companiesAminiot said.
What is the next movement of England Bank?
The British government also left A very little margin of financial maneuveringThere is uncertainty about whether the state will raise taxes, especially since the cost of debt service has increased.
propaganda“It is possible that companies and families are likely to wait for more tax increases or some Additional pieces of the well. So this does not put companies and families in a good position to invest or spend confidence, “said Amiot.
At the same time, and Continuous growth of salariesNearly 6 % in December, which nourishes inflation, putting the central bank in a difficult position, because growth remains weak.
Las Inflation pressure Political leaders are binding, who are still cautious when cutting, while investors yearn for less types.
Evolution for 2026
England Bank Keep the reference interest rate stable In 4.5 % in the last monetary policy meeting. The truth of the last inflation, 2.8 % in February, feeds the hopes of discount, but most analysts agreed that prices will rise strongly in the coming months.
propagandaIn their expectations, S&P Global hopes that the Bank of England will reduce species Up to 4 % at the end of the third quarter of 2025. However, they expect a decrease in species less than their previous expectations, pending more stubborn inflation.
In 2026, growth is expected to accelerateWith the report expected a 1.6 % increase in economic production. “Things are drawn well by 2026, while restoring regional growth, A new descent of species “From 50 basic points and enlargement will return to 2.5 %,” the report says.
