Trade tensions due to US tariffs are among the possible negative factors, according to officials<\/p>\n
The European Commission has cut its forecast for the bloc\u2019s economic growth in 2026 amid risks posed by US tariffs and geopolitical tensions.
\nBrussels signed a trade deal with Washington in July that imposes a 15% tariff on EU exports of cars and most other goods, and commits the bloc to buying $750 billion of US oil and gas and investing $600 billion in the US economy. The agreement, reached after months of tense talks and tariff threats, drew criticism for its perceived imbalance and potential harm to EU competitiveness.
\nIn its twice-yearly outlook released on Monday, the European Commission said it expects the eurozone to grow by 1.2% next year, down from 1.4%, and the broader EU to grow by 1.4% instead of 1.5%. It added that the downgrade reflects higher-than-expected US tariffs on EU exports and uncertainty over possible further US moves.
\n\u201cPersistent trade policy uncertainty continues to weigh on economic activity, with tariffs and non-tariff restrictions potentially constraining EU growth more than expected,\u201d the commission stated. The warning was echoed by EU economy chief Valdis Dombrovskis.<\/p>\n
Read more<\/p>\n
US increasingly frustrated with EU over trade deal \u2013 FT<\/p>\n
\u201cTrade barriers have reached historic highs\u2026 The EU\u2019s highly open economy remains susceptible to ongoing trade restrictions,\u201d he told reporters, adding that US trade policy decisions and reactions by \u201ckey players like China\u201d will likely \u201cdampen global trade.\u201d
\nThe commission also warned that \u201cany further escalation of geopolitical tensions could intensify supply shocks,\u201d while climate-related disasters \u201cpose major risks\u201d to EU growth.
\nFor 2025, the outlook has been revised upward \u2013 largely due to a surge in exports ahead of expected tariff hikes. The eurozone is now forecast to grow by 1.3%, up from 0.9% in May, and the broader EU by 1.4%, up from 1.1%. However, the commission said the forecast \u201cremains subject to high uncertainty,\u201d with the \u201cbalance of risks\u201d\u00a0\u201ctilted to the downside.\u201d<\/p>\n
READ MORE: Foreign investment in EU \u2018frighteningly\u2019 low \u2013 Euractiv<\/p>\n
Dombrovskis said that while the EU faces lower average tariffs than some other US trade partners, which gives the bloc \u201ca relative advantage,\u201d\u00a0\u201cuncertainty will remain a defining feature of the coming years.\u201d He urged Brussels to take \u201cresolute action\u201d to support its economy by accelerating single market integration and reducing red tape.<\/p>\n","protected":false},"excerpt":{"rendered":"
Trade tensions due to US tariffs are among the possible negative factors, according to officials The European Commission has cut its forecast for the bloc\u2019s economic growth in 2026 amid…<\/p>\n","protected":false},"author":1,"featured_media":22692,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[4,6,3],"tags":[],"class_list":["post-22691","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-environment","category-politics"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t