The euro area is steadfast in front of Trump’s fees

Lagard warns of repercussions on the global economy

European Central Bank President Christine Lagarde confirmed on Tuesday that the American customs duties did not affect the euro area to the extent that he was afraid, but she warned of new risks that might loosen on the horizon in a world of ambiguity.

Europe, which records a major surplus in the trade of goods with the United States, was one of the main goals of the customs duties imposed by President Donald Trump on both friends and opponents of the United States.

In July, the European Union concluded a framework agreement that defines customs duties on the majority of exports to the United States by 15 percent, which is a much higher percentage compared to the period before Trump’s return to the White House, but it is less than the very high levels that the American president sometimes threatened.

Lagarde said in a speech in Helsinki that Europe was in 2025 on the “recipient side” of “using trade as a tool for the practice of influence.”

She added that many assumed that the additional American drawings “would cause a great negative shock to the eurozone economy.” But these “assumptions were not fulfilled.”

Lagarde pointed to several reasons for this, including that the response was limited, which allowed the occurrence of a major defect in supply chains, while the high value of the euro was provided against the dollar due to concerns about US economic policies in additional support.

She added that the state of ambiguity surrounding commercial policies affected growth and investment less than expected.

This is due to the reasons for the July agreement with Trump and European governments taking measures to enhance growth, such as pledge to increase defense spending.

But she warned that in the current atmosphere, “the new commercial and geopolitical shocks will remain a fixed feature of our environment.”

Regarding interest rates, she emphasized that the European Central Bank is still in a “good situation” after the recent declines in inflation, with the shock of the war years in Ukraine and the problems of supply chains after the Kofid-19s.

Inflation in the eurozone has settled around the goal of the European Central Bank of 2 percent in recent months.

After reducing interest rates from its high standard levels, the central bank kept its rates during its past two socialists, and most analysts do not expect any change soon.