Deputy ECB Chief Says Trump More Detrimental Than Covid
The European Central Bank's vice president, Luis de Guindos, has asserted that the current US administration under President Donald Trump has generated more “uncertainty” than the Covid-19 pandemic. In an interview with The Sunday Times, de...
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The European Central Bank's vice president, Luis de Guindos, has asserted that the current US administration under President Donald Trump has generated more “uncertainty” than the Covid-19 pandemic.
In an interview with The Sunday Times, de Guindos expressed concern over Trump’s tariff policies and proposed reforms to corporate taxes and financial regulations. He pointed out that the actions undertaken by the new US administration have led to short-term market volatility and have complicated predictions regarding inflation expectations and interest rates.
“We need to consider the uncertainty of the current environment, which is even higher than it was during the pandemic,” the ECB vice president stated.
He noted that the administration's reluctance to embrace multilateralism—characterized by cooperation between jurisdictions to tackle common issues—represents a significant shift and contributes greatly to uncertainty. “What we’re seeing is that the new US administration isn’t very open to continuing with multilateralism, which is about cooperation across jurisdictions and finding common solutions for common problems. This is a very important change, and a big source of uncertainty,” he added.
Additionally, de Guindos expressed concern that fears surrounding Trump's future actions have negatively impacted consumer confidence. He pointed out that the anticipated rise in business investment and household consumption has yet to materialize, attributing a decline in Eurozone growth projections to the US administration's activities.
“Real wages have increased, inflation is declining, interest rates are coming down and financing conditions are better. But still, the reality is that consumption is not picking up,” he explained.
He elaborated that consumer behavior is not solely influenced by immediate changes in real disposable income; rather, it is also shaped by medium-term economic outlooks, which are currently fraught with uncertainty. “The possibility of a trade war or wider geopolitical conflict has an impact on consumer confidence,” he remarked, characterizing trade wars as a “lose-lose situation for everybody.”
Last week, Trump’s 25% tariff increase on steel and aluminum imports from the EU came into effect, following the expiration of prior exemptions. In response, Brussels has pledged swift and proportional countermeasures.
The European Commission denounced Trump's disruptive and “unjustified” tariffs and has committed to implementing counter-tariffs on €26 billion worth of US goods starting in April. “Tariffs are taxes, they are bad,” EU Commission President Ursula von der Leyen stated while announcing the retaliatory actions.
Thomas Evans for TROIB News
In an interview with The Sunday Times, de Guindos expressed concern over Trump’s tariff policies and proposed reforms to corporate taxes and financial regulations. He pointed out that the actions undertaken by the new US administration have led to short-term market volatility and have complicated predictions regarding inflation expectations and interest rates.
“We need to consider the uncertainty of the current environment, which is even higher than it was during the pandemic,” the ECB vice president stated.
He noted that the administration's reluctance to embrace multilateralism—characterized by cooperation between jurisdictions to tackle common issues—represents a significant shift and contributes greatly to uncertainty. “What we’re seeing is that the new US administration isn’t very open to continuing with multilateralism, which is about cooperation across jurisdictions and finding common solutions for common problems. This is a very important change, and a big source of uncertainty,” he added.
Additionally, de Guindos expressed concern that fears surrounding Trump's future actions have negatively impacted consumer confidence. He pointed out that the anticipated rise in business investment and household consumption has yet to materialize, attributing a decline in Eurozone growth projections to the US administration's activities.
“Real wages have increased, inflation is declining, interest rates are coming down and financing conditions are better. But still, the reality is that consumption is not picking up,” he explained.
He elaborated that consumer behavior is not solely influenced by immediate changes in real disposable income; rather, it is also shaped by medium-term economic outlooks, which are currently fraught with uncertainty. “The possibility of a trade war or wider geopolitical conflict has an impact on consumer confidence,” he remarked, characterizing trade wars as a “lose-lose situation for everybody.”
Last week, Trump’s 25% tariff increase on steel and aluminum imports from the EU came into effect, following the expiration of prior exemptions. In response, Brussels has pledged swift and proportional countermeasures.
The European Commission denounced Trump's disruptive and “unjustified” tariffs and has committed to implementing counter-tariffs on €26 billion worth of US goods starting in April. “Tariffs are taxes, they are bad,” EU Commission President Ursula von der Leyen stated while announcing the retaliatory actions.
Thomas Evans for TROIB News
