Latest news with #CarstenBrzeski
Reuters
5 days ago
- Business
- Reuters
Euro zone economy, ECB outlook steady despite US tariff threats: Reuters poll
BENGALURU, July 17 (Reuters) - A steady outlook for the euro zone economy remains intact, at least for now, according to most economists in a Reuters poll, despite a recent U.S. threat of a 30% tariff on European Union goods. The EU has warned of retaliatory measures if a deal is not reached before U.S. President Trump's proposed tariffs take effect on August 1, adding complexity for European Central Bank policymakers before next week's policy meeting. The 30% duty is steeper than the ECB's worst-case projection last month of 20%. But those uncertainties will not be enough to derail the central bank's intention to pause its year-long rate-cutting campaign, some ECB policymakers told Reuters. All 84 economists in a July 10-17 Reuters poll expected the central bank to hold the deposit rate at 2.00% on July 24. Respondents were hesitant to change economic forecasts, citing the lack of clarity around the trade conflict, but some hinted risks were skewed to the downside. Poll median forecasts suggested the euro zone economy will expand 1.0% this year, pick up to 1.2% next year and 1.5% in 2027, largely unchanged from a month ago. "A deal that would prevent the 30% is still likely. It remains our base case scenario ... we haven't changed that. But I'm leaning towards a more downbeat base case with a high risk there won't be a deal," Carsten Brzeski, global head of macro at ING, said. "Given everything is even more uncertain, another preemptive rate cut doesn't make sense ... There is still a point to be made to cut rates in September and this is not so much to support growth but driven by the stronger euro that would continue if we were to see a deal." The euro has strengthened 12% so far this year against the U.S. dollar, one of the key reasons behind the recent ease in inflation. The common currency will gain nearly 3.5% to hit $1.20 in a year, a separate Reuters survey suggested. A more than 58% majority, 49 of 84, predicted the ECB would cut rates once more, likely in September, a slightly bigger majority than around 53% last month. Twenty economists said there would be no more reductions, while only 15 said two cuts were coming. That coincides with a steady price outlook which showed inflation averaging around 2%, where the ECB targets it to be, over the coming three years, largely the same as predicted in a June survey. "The ECB can't say they are done because there's so much fundamental uncertainty. But the burden of proof for further rate cuts is quite high," Bas van Geffen, senior macro strategist at Rabobank, said. "The risk is a worse outcome. A deal is not guaranteed and it's become pretty clear Europe would not be very happy with a 30% tariff. They won't just accept that. Europe will initially retaliate with their own rebalancing tariffs." Germany's economy - the largest in the region - will grow a mere 0.2% this year and 1.2% in 2026, according to the poll, largely unchanged from April's forecasts. That was despite optimism around infrastructure spending plans. Growth in France will be 0.5% this year and 0.9% in 2026, the poll predicted. (Other stories from the Reuters global economic poll)
The Star
08-07-2025
- Business
- The Star
German exports to U.S. plunge in May as tariff pause nears expiry
BERLIN, July 8 (Xinhua) -- German exports to the United States fell sharply in May, hitting their lowest level in more than three years as the threat of new tariffs continued to cast a shadow over Europe's largest economy. Data released Tuesday by the Federal Statistical Office showed that exports to the United States slumped by 13.8 percent year-on-year. On a monthly basis, shipments fell by 7.7 percent, marking the lowest level since March 2022. Although the United States remains Germany's largest single export market, its share has been shrinking amid ongoing trade tensions. Imports from the United States also decreased in May, falling 10.7 percent from April, pointing to a broader weakening in bilateral trade flows. The data comes just ahead of a looming deadline for potential punitive tariffs from Washington. In April, the U.S. administration announced the introduction of so-called "reciprocal tariffs" on imports from the European Union (EU). Initially scheduled for implementation on July 9, the measures were later postponed to Aug. 1. Currently, the United States levies 25 percent tariffs on European cars and car parts, and 50 percent on steel and aluminum products, raising concerns among exporters. Germany's ifo Institute reported that export expectations among German companies weakened further in June, with its outlook index falling to -3.9 points from -3 points in May. "The tariff threats from the U.S. are still on the table," said Klaus Wohlrabe, head of surveys at ifo. "An agreement between the EU and the U.S. has yet to be reached, and this uncertainty is lowering exporters' expectations." Overall, Germany's exports declined by 1.4 percent month-on-month in May, the statistics office said. Carsten Brzeski, global head of Macro for ING Research, said German exports continue to face significant headwinds. "The risk of further tariffs hangs like a sword of Damocles over German and European exporters," he noted, adding that the strengthening euro against the U.S. dollar also adds to the concerns. Brzeski warned that trade uncertainty and currency pressure could further increase the risk of stagnation or even contraction of the German economy in the second quarter.
Local Germany
08-07-2025
- Business
- Local Germany
Berlin urges quick trade deal with US as German exports tumble
Exports to the United States, Germany's largest trading partner, fell by 7.7 percent compared to April to 12.1 billion euros, federal statistics office Destatis said. The drop left German exports to the United States at their lowest level since March 2022, came after the initial April announcement by Trump of sweeping "Liberation Day" tariffs . The punitive reciprocal rates which could see EU exports hit with a flat 20 percent tariff were first suspended until July 9th, before Washington extended the pause till August 1st. Overall, Germany exported a total of 129.4 billion euros' worth of goods in May, a drop of 1.4 percent on the previous month. Analysts surveyed by financial data firm FactSet had expected the trade barometer to stagnate. ING bank analyst Carsten Brzeski said May's fall likely reflected a reversal of earlier "frontloading" after American customers had rushed to get orders in before announced tariffs could take effect. "This effect has now dissipated," he said, adding that "the risk of (more) tariffs hangs like a sword of Damocles over German and European exporters". Advertisement The White House on Monday said it had sent letters to more than a dozen countries detailing the tariffs they would face if they did not reach new trade agreements with Washington by August 1st. Ongoing trade tensions threaten new pain for export powerhouse Germany, whose economy is already reeling from high production costs and intense Chinese competition in sectors from cars to machine tools. German Chancellor Friedrich Merz last week called on the EU to strike a "quick and simple" bargain with the United States, saying Germany's "key industries" needed clarity. READ ALSO: Germany considers buying US air defence systems for Ukraine
France 24
08-07-2025
- Business
- France 24
German exports to US tumble as Berlin urges quick trade deal
Exports to the United States, Germany's largest trading partner, fell by 7.7 percent compared to April to 12.1 billion euros ($14.2 billion), federal statistics office Destatis said. The drop left German exports to the United States at their lowest level since March 2022, came after the initial April announcement by Trump of sweeping "Liberation Day" tariffs. The punitive reciprocal rates which could see EU exports hit with a flat 20 percent tariff were first suspended until July 9, before Washington extended the pause till August 1. Overall, Germany exported a total of 129.4 billion euros' worth of goods in May, a drop of 1.4 percent on the previous month. Analysts surveyed by financial data firm FactSet had expected the trade barometer to stagnate. ING bank analyst Carsten Brzeski said May's fall likely reflected a reversal of earlier "frontloading" after American customers had rushed to get orders in before announced tariffs could take effect. "This effect has now dissipated," he said, adding that "the risk of (more) tariffs hangs like a sword of Damocles over German and European exporters". The White House on Monday said it had sent letters to more than a dozen countries detailing the tariffs they would face if they did not reach new trade agreements with Washington by August 1. Ongoing trade tensions threaten new pain for export powerhouse Germany, whose economy is already reeling from high production costs and intense Chinese competition in sectors from cars to machine tools. German Chancellor Friedrich Merz last week called on the EU to strike a "quick and simple" bargain with the United States, saying Germany's "key industries" needed clarity.
Qatar Tribune
07-07-2025
- Business
- Qatar Tribune
German factory output up but tariff threat looms
Agencies German industrial production rose unexpectedly strongly in May, official data showed Monday, boosting hopes that Europe's top economy has turned a corner despite trade tensions with the United States. Industrial production rose by 1.2 percent month-on-month, after dropping 1.6 percent in April after US President Donald Trump announced swinging tariffs, the federal statistics agency Destatis said. Analysts polled by financial data firm FactSet had forecast a slight decline of 0.1 percent. The rebound was driven by a surge in energy output and a strong performance from the beleaguered automotive sector, where production was up 4.9 percent. Overall, industrial production was up one percent on the same month last year, underlining hopes that the worst might be over for German industry after a series of strong production and orders data releases since the start of the bank analyst Carsten Brzeski said the data 'increased the likelihood' that the industrial recovery of recent months was driven by more than 'front-loading' as a result of customers putting in orders before US tariffs take effect. 'It's too early to give the all-clear, but signs of at least a cyclical rebound, albeit from low levels, are increasing', he said. The outlook was nevertheless troubled by the potential imposition of reciprocal tariffs that were announced by Washington in April but promptly suspended for 90 days.
