This photo illustration features a double exposure image of U.S. President Donald Trump set against the backdrop of the EU flag.
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Leaders of the European Union have called for a measured response to the tariffs imposed by U.S. President Donald Trump, which have disrupted global markets, following China’s recent retaliatory actions.
“The reaction to the tariff conflict was expected. We must withstand the stock market turmoil from Japan to Europe to America without making hasty decisions,” stated Polish Prime Minister Donald Tusk in a social media update translated by Google. “The Polish stock market has also felt the impact, but we possess political and economic stability that will help us navigate this challenging time. We will endure calmly!”
On the same day, Germany’s acting Economy Minister Robert Habeck emphasized the importance of a “calm and unified” European response, highlighting that individual countries cannot resolve the issue alone, as reported by Reuters. This marked a pivot from his previous assurances that Trump would “bend to pressure” if Europe stands together against tariffs.
European stocks fell another 4.2% at 11:35 a.m. London time, amid concerns over a potential decline in U.S. demand for European products and increased recession risks for the world’s leading economy.
Poland and Germany are among the 27 nations facing 20% mutual tariffs under Trump’s recent measures targeting the European Union, announced last week alongside a broader set of global duties.
The impacts differ for the two countries: export-driven Germany, trading goods worth 157.9 billion euros ($173 billion) across the Atlantic, is expected to be significantly affected in its struggling auto sector.
Previously, Tusk mentioned that the Polish economy could experience a 0.4% decrease in gross domestic product (GDP) due to the latest U.S. tariffs. The Polish Economic Institute pointed out that U.S. demand accounts for only 2.6% of Poland’s GDP, but emphasized that tariffs could have broader indirect risks, contributing to sector-specific burdens through escalating economic uncertainty.
Analyzing Central and Eastern European economies, ING analysts suggested that “the US-EU trade conflict alone wouldn’t topple the entire CEE economy via the export channel,” but noted lingering risks from inflationary pressures, including imported and perceived inflation.
“Perceived inflation is a subtle danger: by undermining consumer confidence, it could lead to increased savings and stymie momentum in consumption growth. With the region emerging from a cost-of-living crisis in some cases, particularly in Hungary, the spillover effect of perceived inflation into subdued consumption is a trend to monitor,” they cautioned, also mentioning possible adverse effects on Western European foreign direct investment.
“This gap could be rapidly filled by Chinese investors, potentially offering some beneficial stimulus but also creating additional challenges for the European Commission, while exposing recipient countries to EU-China trade tensions,” they noted.
The EU’s response remains uncertain, especially in light of recent forecasts from Goldman Sachs indicating that Trump’s tariffs could impose a total trade-related impact of 0.7% on the euro zone’s GDP this year. Deutsche Bank analysts estimated that the White House measures could reduce the EU’s economic output by 0.4-0.7 percentage points, cautioning about labor market ramifications and “indirect costs from abroad, including a substantial increase in the risk of recession in the U.S.”
So far, EU chief Ursula von der Leyen has indicated the bloc’s willingness to implement “further countermeasures” in response to Trump’s actions if discussions fail, with reports from Reuters suggesting that the union may be preparing for an imminent counterstrike. This reserved stance contrasts with the more aggressive retaliatory tariffs enacted by Canada and China in recent months against Trump’s protectionist trade policies.
Amid a deepening trade war and significant declines in U.S. and global markets, Trump reassured the public on Sunday that he does not desire declines in the economy, stating, “sometimes you have to take medicine to fix something,” while reiterating his commitment to the tariffs aimed at reducing the U.S. trade deficit with other countries.
