European Central Bank Cuts Rates Amid ‘Exceptional’ Tariff Uncertainty

The European Central Bank cut interest rates on Thursday as policymakers grappled with heightened economic uncertainty, particularly from President Trump’s chaotic trade policies, that is expected to weaken the region’s economy.

Policymakers, who set rates for the 20 countries that use the euro, lowered their key rate a quarter point to 2.25 percent. It was the seventh consecutive cut since June as the economic outlook has darkened and inflation has slowed.

The region faces the dual challenges of tariffs on goods sent to the United States and diminished demand for exports to other countries as trade uncertainty weighs on the global economy. Europe’s largest economy, Germany, is heavily oriented toward exports.

“The economic outlook is clouded by exceptional uncertainty,” Christine Lagarde, the president of the central bank, said on Thursday at a news conference in Frankfurt, adding that all members of the bank’s Governing Council unanimously agreed to the rate cut.

Mr. Trump has raised tariffs on nearly all imports to the United States from most countries to 10 percent, increasing the specter of a global trade war. There are also higher tariffs on certain goods like cars and steel, while a trade war with China has pushed import levies between each country above 100 percent.

There is still the threat that higher tariffs will once again be imposed on dozens of countries after Mr. Trump’s 90-day pause on reciprocal tariffs expires. The Trump administration is negotiating with countries, but the European Union could face a 20 percent tariff again.