The Bundesbank, Germany’s central bank, estimates that President Donald Trump’s tariff policy will weigh on the eurozone, reducing expected economic expansion in the region by 0.3 points through 2027.
“The macroeconomic growth losses are limited. After three years, the eurozone’s real GDP (gross domestic product) is only 0.3 points below the baseline,” the Bundesbank’s monthly report, published today, stated, in reference to the tariffs imposed by Trump in 2025.
According to the German central bank, “the effects on rising consumer prices are negligible,” indicating that for Germany and the eurozone, “at the macroeconomic level, the repercussions” of Trump’s tariff offensive “have so far been moderate,” at least in the short term.
The Bundesbank report notes that “in the short term, the tightening of U.S. trade policy has affected economic developments somewhat less than expected,” although the German central bank acknowledged that the Trump administration’s tariffs present the European Union with “the challenge of consolidating itself” as an international trade actor.
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“For the European Union, the challenge lies in consolidating itself as an actor in trade policy matters in this increasingly difficult foreign trade environment,” the report stated, noting that international trade uncertainty, along with a lower volume of exports to the U.S., are factors explaining the economic difficulties experienced by Germany and the eurozone.
The Bundesbank also acknowledged that “the recent restrictive trade policy measures adopted by the United States accentuate a fragmentation of the world economy, already perceptible for some time, along geopolitical lines.”
German authorities forecast that the economy will grow 0.5% in 2026, half of what was initially projected, mainly due to the economic effects of the war in the Persian Gulf.
According to data from last May from the European Commission, the growth forecast for the eurozone in 2026 is 0.9%.
