Europe could fall into recession in 2025 under Trump's economic proposals, a major EU bank said. The eurozone may fall from "sluggish growth into a full-blown recession," ING analysts wrote. The US is Europe's most important export market, meaning tariffs would cause economic pain.
The eurozone economy faces the possibility of a looming recession as tariffs promised by President-elect Trump look set to dampen growth, according to analysts at a Dutch bank. "A looming new trade war could push the eurozone economy from sluggish growth into a full-blown recession," a team including James Knightley, chief international economist at ING, wrote in a note to clients. Trump pledged on the campaign trail to impose a fresh era of trade tariffs, building on policies he enacted during his first term as president.
He has vowed to impose a 60% tariff on goods imported from China and a 10% blanket tariff on all other goods entering the US. While China was the primary focus of the tariffs the first time around, Europe could be in the firing line in Trump's second term. European Union economic growth is already struggling, and has lagged behind the US in recent years.
The bloc expanded by 0.2% in the most recent quarter, compared to 0.7% growth in the US.
The US is Europe's largest market for exports, particularly for industries like automobiles, pharmaceuticals, and luxury goods, so any tariffs could cause further pain. Germany's stuttering auto industry , a crucial part of Europe's largest e.