Trump Lifts 25% Tariff on Indian Goods in Strategic U.S.–India Trade and Energy Deal 
Russian Stocks End Mixed as MOEX Index Closes Flat Amid Commodity Strength 
U.S. Stock Futures Slide as Tech Rout Deepens on Amazon Capex Shock 
Japan Economy Poised for Q4 2025 Growth as Investment and Consumption Hold Firm 
South Korea Assures U.S. on Trade Deal Commitments Amid Tariff Concerns 
Global Markets Slide as AI, Crypto, and Precious Metals Face Heightened Volatility 
Japanese Pharmaceutical Stocks Slide as TrumpRx.gov Launch Sparks Market Concerns 
Trump’s Inflation Claims Clash With Voters’ Cost-of-Living Reality 
Oil Prices Slide on US-Iran Talks, Dollar Strength and Profit-Taking Pressure 
Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off 
South Korea’s Weak Won Struggles as Retail Investors Pour Money Into U.S. Stocks 
Dollar Steadies Ahead of ECB and BoE Decisions as Markets Turn Risk-Off 
Gold and Silver Prices Slide as Dollar Strength and Easing Tensions Weigh on Metals 
Gold Prices Slide Below $5,000 as Strong Dollar and Central Bank Outlook Weigh on Metals 
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target 
Trump Endorses Japan’s Sanae Takaichi Ahead of Crucial Election Amid Market and China Tensions 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
As Donald Trump hints at renewed US tariffs, Citi economists suggest potential disinflationary impacts on the Eurozone. With limited pass-through from import prices and weakened growth forecasts, the already-fragile European economy faces further challenges in its recovery journey.
Tariffs Could Reverse Economic Momentum in the Eurozone
While President-elect Trump has hinted that trade tariffs will be on his political agenda, Citi argues that they could have the opposite effect in the Eurozone, where inflation is already at a low point, and that a tit-for-tat U.S.-EU trade spat could spell fresh inflationary pressures, Investing.com shares.
"Even if the EU retaliates like-for-like with reciprocal tariffs, the HICP impact is likely negligible," observed economists from Citi in a recent note.
U.S. imports account for little over 10% of all commodities imported into the Euro Area. Of this, 25% are energy imports, however experts predict that this sector will remain tax-free. A mere 6% of U.S. imports to the Eurozone are for consumption products, therefore the import price-to-HICP passthrough is "usually low," they emphasized.
Eurozone Growth Downgrade Highlights Economic Risks
After downgrading Eurozone GDP growth by 0.3%, economists warned that the prospect of a 10% blanket US tariff on EU goods and additional measures against China, the EU's largest import market, will further burden economic growth in the single currency.
"This shock to the already-struggling European manufacturing sector could weigh on employment and wages in the tradeable sector and beyond," according to the researchers.
While the United States and China have profited from trade diversion in the past due to the collapse of US dependency on China, Citi predicts that tariffs will decrease demand for products from the Eurozone.
Lessons From Trump's Past Tariffs on Europe
To get a sense of what lies ahead for the Eurozone, it's helpful to examine the effects of tariffs imposed by the previous Trump administration. Economists have found that the increase in Chinese import penetration has had "likely sizable disinflationary implications," making it the most consequential outcome of Trump's past trade fights for Europe.
