Economists are still trying to get a handle on how much harm the US tariffs will do around the world. In Europe, the main takeaway so far is that the fledgling economic recovery is at serious risk from the hit to exports and the uncertainty faced by companies and households. 

The European Union faces levies of 20% following President Donald Trump’s announcements on Wednesday, while the UK is getting a 10% duty and Switzerland a 31% US import tax. 

Read more: Trump’s Tariff Broadside Sends Shockwaves Across Global Economy

Bloomberg Economics estimates in a preliminary analysis that these measures could halve EU exports to the US in the medium term and put more than 1% of economic output at risk.

Other analysts are also lowering their expectations for the region. ING thinks that including the impact on confidence, the euro zone will continue to grow only at a “snail’s pace.” JPMorgan says the risks to their outlook for the bloc are “materially downwards” and Morgan Stanley sees the eventual hit closer to the upper range of its latest estimates. 

Read more: France Eyes US Big Tech in EU Retaliation to Trump’s Tariffs

What stands in the way of a more concrete assessment is that much remains unclear. European Commission President Ursula von der Leyen vowed countermeasures early on Thursday, without specifying what they could look like. Negotiations with the US are also possible. 

All of that means it’s especially difficult to predict what the tariffs will do to euro-zone inflation, keeping the outcome of the next European Central Bank meeting on April 17 open.

While investors moved to price a greater probability of an interest-rate cut, Bundesbank President Joachim Nagel sounded more cautious. His Greek colleague Yannis Stournaras, on the other hand, said inflation will continue to slow and that the tariffs don’t stand in the way of another reduction in borrowing costs. 

Read more: Trump’s Swiss Tariffs Higher Than Expected, SNB’s Tschudin Says

For the Swiss National Bank, the challenge is that the nation’s currency could further appreciate due to trade uncertainty and exacerbate the downward pressure on prices from slower economic growth. Oddo BHF economists reckon that could lead the central bank to cut rates to 0% or even negative territory more quickly.

—Alexander Weber in Frankfurt

Bloomberg’s tariff tracker follows all the twists and turns of global trade wars. Click here for more of Bloomberg.com’s most-read stories about trade, supply chains and shipping.

Charted Territory

Sticker shock | Volkswagen plans to add import fees to the sticker prices of its vehicles shipped into the US, indicating Trump’s 25% auto tariffs will have an immediate effect on Europe’s biggest carmaker.

Trump’s reciprocal tariffs have sparked fears of a US recession and a global slowdown, as well as the end of a post-war order. How are governments preparing and how are markets reacting? Join us for a Live Q&A today at 11 a.m. EDT.

Today’s Must Reads

• Japan’s Trade Minister said the Trump administration’s latest tariff broadside is extremely regrettable and pushed for an exemption.
• South Korea’s interim leadership was thrown into emergency mode to protect the export-reliant economy from a trade crisis after the Trump administration announced one of the highest tariff rates to be imposed on a US security ally.
• Canada and Mexico escaped Trump’s new round of tariff announcements, a relief for businesses and investors in the two biggest US trading partners.
• The UK will not retaliate against the US afte  Trump imposed 10% tariffs on all UK imports, and will instead continue to pursue a trade deal.
• South Africa’s Presidency said tariffs announced by Trump  affirm the urgency to negotiate a new bilateral and mutually beneficial trade agreement with the US.
• Trump’s latest tariff hikes threaten to inflict a bigger hit on China’s economy than it suffered during his first trade war.
• On the latest episode of Trumponomics: Host Stephanie Flanders is joined by Martin Wolf, chief economics commentator at the Financial Times. Trump reckons the current global trade system is unfair to the US and tariffs are the tool to balance the scales. But how did the world arrive at this point? Listen on Apple, Spotify, or wherever you get your podcasts.

On the Bloomberg Terminal

• In Trump’s new tariff plan, there is still much uncertainty — and room for negotiation. But Bloomberg Economics estimates that the latest move, coupled with new autos levies, could add 16 percentage points to the US average tariff rate. This could create sizable stagflation risks for the US economy, and pose major challenges to partners reliant on US demand.
• For Bloomberg Economics trade analysis: BECO MODELS TRADE
• Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
• Use the AHOY function to track global commodities trade flows.
• See DSET CHOKE for a dataset to monitor shipping chokepoints. 
• For freight dashboards, see BI RAIL, BI TRCK and BI SHIP and BI 3PLS
• Click HERE for automated stories about supply chains.
• On the Bloomberg Terminal, type NH FWV for FreightWaves content.
• See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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