Global growth under threat from US tariffs: ECB

European Central Bank says US tariffs putting global growth at risk, cooling confidence

ECB headquarters in Frankfurt. (Image courtesy of Flickr user: Paul Haeder)

ECB headquarters in Frankfurt. (Image courtesy of Flickr user: Paul Haeder)

TAIPEI (Taiwan News) – The European Central Bank (ECB) said U.S. tariff increases are putting global growth at risk, and having an adverse effect on confidence, in a regular bulletin, published on August 9.

The ECB said that if the U.S. follows through with all announced tariffs, the average U.S. tariff rate will be the highest in 50 years, putting the global economy in a vulnerable position.

Last week, the U.S. announced that it will raise the tariff rate on US$200 billion (NT$18.36 trillion) worth of Chinese imports from 10 percent to 25 percent. In response, China announced that it will slap a 25 percent tariff on US$60 billion worth of U.S. imports.

The ECB said in its bulletin "Downside risks to the global economy have intensified amid actions and threats regarding trade tariff increases by the United States and possible retaliation by the affected countries.

"Complex supply chains could further amplify the adverse effects of protectionism on the world economy.

"These developments constitute a serious risk to the outlook for global trade and activity in the short to medium term."

The ECB also said that despite recent good growth in the U.S., concerns about the trade war were having a negative effect on business investment.

Despite the dark clouds forming due to the trade war, the overall risks to global growth remain balanced, according to the ECB.