Category: general

The post EU set to slash 2026 growth forecast amid trade tensions appeared com. The European Union will reduce its growth forecasts for 2026 as trade disagreements persist, alongside weak economic performance by its largest member countries and political upheaval. The revised outlook, due to be released next week, indicates that Europe’s recovery is much shakier than officials had anticipated. EU officials say increasing U. S. tariffs and unresolved trade disputes are now the top obstacles to growth. The Trump administration’s tariff measures, introduced last year, continue to affect European exporters, particularly in manufacturing-dominated sectors such as steel, machinery, and automobiles. Brussels had expected pressures to abate by 2026, but had also anticipated a modest recovery. Previous estimates put growth at around 1. 4%. That estimate is now expected to be drastically lower, reflecting the cumulative impact of trade barriers and investor risk. The jolts from U. S.-EU trade tensions are also giving businesses pause. Local companies are deferring investments amid fears about market access, supply chain risks, and the uncertainty of tariffs. Emerging global competition, a stronger euro, and a downturn in foreign demand are also contributing to headwinds for the export outlook. The uncertainty itself, economists say, is now one of Europe’s most serious economic threats, as opposed to the tariffs alone. Confidence has declined, supply-chain planning has become more difficult, and the specter of further escalation in trade looms over every forecast. Major economies lose momentum Germany, the EU’s largest economy, is experiencing a particularly challenging time. Yet despite expanding public spending on defense and infrastructure, the nation’s recovery has lagged. Industrial production has struggled to gain traction, and Germany’s chronic competitiveness woes have taken root. What was counted on to be Germany’s best post-pandemic year of growth has now become just another disappointing cycle. The country’s Council of Economic Experts recently cut its 2026 growth forecasts to 1%, citing weaker global demand and.