ECB Warns US Tariffs Threaten Eurozone Growth, Stability

European Central Bank officials have raised concerns about the negative economic impact of recent and proposed U.S. tariff and regulatory measures on the Eurozone. ECB Board member Class Nott warned that a 25% U.S. tariff on imports could decrease Eurozone GDP by about 0.3%, especially if the EU retaliates, potentially exacerbating economic slowdown and affecting inflation trends. President Christine Lagarde noted that U.S. tariffs could have a disinflationary effect in Europe if China redirects exports to the region, but stressed the situation's complexity due to other fiscal factors. Top ECB policymakers, including Francois Villeroy de Galhau, criticized aggressive U.S. trade policies as destabilizing and called for cooperative, multilateral approaches to trade. Additionally, the ECB has expressed apprehension about new U.S. regulations that could increase dollar-backed stablecoin dominance, urging the EU to consider amending its MiCA regulation to protect economic stability, though this has sparked debate within the European Commission. Overall, ECB leaders advocate for careful assessment and international collaboration to address the challenges posed by evolving U.S. economic policies.