Briefing - Europe’s policy options in the face of Trump’s global economic reordering - 19-03-2025
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In this paper, we propose and analyse four scenarios of a second Trump administration’s economic policy and its impact on Europe, ranging all the way from moderate tariffs to full trade war, a full multilateral breakdown with the US leaving the IMF down toBriefing - Europe’s policy options in the face of Trump’s global economic reordering - 19-03-2025
In this paper, we propose and analyse four scenarios of a second Trump administration’s economic policy and its impact on Europe, ranging all the way from moderate tariffs to full trade war, a full multilateral breakdown with the US leaving the IMF down to a more cooperative exchange rate realignment agreement. We assess two trade scenarios quantitatively and outline broader policy shocks and their economic consequences. Our findings highlight significant challenges for the ECB, requiring responses to trade disruptions, financial instability, and potential global economic reordering. We offer specific policy recommendations for the ECB to navigate these uncertainties. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 20 March 2025. Source : © European Union, 2025 - EP Read more