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    As Backlash to Trump’s Tariffs Grows, Europe Boycotts American Brands

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    A shifting perception of the United States amid President Trump’s trade war is prompting Europeans to pivot decisively away from U.S. goods and services.For motorcycle lovers in Sweden, Harley-Davidson is the hottest brand on the road. Jack Daniels whiskey beckons from the bar at British pubs. In France, Levis jeans are all about chic.But in the tumult of President Trump’s trade war with Europe, many European consumers are starting to avoid U.S. products and services in what appears to be a decisive and potentially long-term shift away from buying American, according to a new assessment by the European Central Bank.In April, Mr. Trump imposed a 10 percent blanket tariff on America’s trading partners, and threatened “reciprocal tariffs” on many of those, including the European Union. Companies like Tesla and McDonald’s are seeing customers in Europe put off by “Made in America.”“The newly imposed U.S. trade tariffs on European products are causing European consumers to think twice about what’s in their shopping cart,” the E.C.B. wrote in a blog post about its research on consumer behavior. “Consumers are very willing to actively move away from U.S. products and services.”Europeans had already begun testing grass-roots boycotts on American products, including Heinz ketchup and Lay’s potato chips, shortly after Mr. Trump took office. His threats to take over Greenland, part of Denmark, energized Danes to organize no-buy campaigns on Facebook. Tesla owners in Sweden slapped “shame” bumper stickers on their cars to distance themselves from Elon Musk, the Tesla chief executive who is one of Mr. Trump’s top advisers.Motorcycles in a Harley-Davidson dealership in Paris. The E.C.B. study said that even households that could bear the brunt of higher prices were moving away from U.S. goods.Gonzalo Fuentes/ReutersWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      European Central Bank Cuts Rates Amid ‘Exceptional’ Tariff Uncertainty

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      Policymakers lowered rates a quarter point and said that the region’s growth outlook had “deteriorated” because of rising trade tensions.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.

      Source: European Central BankBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      The Guardian view on Friedrich Merz’s grand coalition: gambling on a new centre ground | Editorial

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      Some years ago, hundreds of German finance ministry staff dressed in black and formed a giant zero to salute their boss, Wolfgang Schäuble, as he left office. It was a tribute to Mr Schäuble’s extreme fiscal conservatism, which had delivered Germany’s first balanced budget in the postwar period. Amid resurgent prosperity in the Angela Merkel years, the so-called black zero – symbolising a constitutional prohibition on public debt – had gradually acquired cult status.As a new administration prepares to take power in Berlin, it seems unlikely that human euro signs will welcome the latest politician to take on Mr Schäuble’s former role. But in dramatic fashion, the spending taps are set to be turned on. Via a swiftly staged March vote in the outgoing Bundestag, “debt brake” dogma was consigned to history by the chancellor‑elect, Friedrich Merz. The way was thus paved for groundbreaking expenditure on defence, and the overhaul of an economy being left behind in a changed, suddenly menacing world.So much for the theory – now for the practice. Mr Merz, the centre-right leader of the Christian Democratic Union (CDU), last week concluded the fastest set of coalition talks since 2009. Pending approval of the deal by Social Democratic party (SPD) members, he is expected to be sworn in as chancellor in by early May. In office, the “grand coalition” agreed between the CDU and the SPD – handed seven ministries including finance and defence – will immediately be confronted by challenges that dwarf those faced by almost all its predecessors.The US under Donald Trump, whether as economic partner or military ally, can no longer be relied upon – an era-defining shift whatever the outcome of the current tariff wars and Mr Trump’s negotiations with Moscow over Ukraine. China, once a vast outlet for the exports which fuelled growth, has morphed into a fearsome competitor, including on German soil. A stagnant economy, combined with a post-Merkel backlash against migration, has accelerated the rise of Alternative für Deutschland (AfD), one of the most extreme far‑right parties in Europe. Last week, a poll fatefully placed the AfD in the lead for the first time.The pressure from the right – both from within his own party and from the AfD – is having an impact. Mr Merz’s Trumpian promise to turn asylum seekers away at German borders from his “first day”, along with other draconian measures, will only allow the far right to up the ante still further. Meanwhile, he also appears to be looking for wriggle room on agreed coalition commitments to the less well off and to climate targets.Nevertheless, the broad economic thrust of the deal remains right for troubling times. The European Central Bank must play its part – by keeping yields on a leash. As Germany’s neighbours deal with similar geopolitical threats and uncertainties, the ability of the EU’s most powerful member state to show leadership and forge a path through the crisis will be crucial. With short-term growth acutely vulnerable to mood swings in the White House, the effects of spending will take time to be felt in people’s everyday lives. But the prospect of a transformative increase in public investment offers the hope of industrial renaissance and a restoration of voters’ trust in the political centre.Alongside his SPD counterparts last week, Mr Merz confidently announced that Germany was “back on track”. Europe badly needs him to be right.

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      E.C.B. Cuts Interest Rates Again, With an Uncertain Path Ahead

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      Vows by European leaders in increase borrowing to ramp up military spending has reshaped the fiscal picture that the central bank must confront.The European Central Bank lowered interest rates on Thursday, the sixth consecutive cut, as the economic landscape for the region rapidly changes.The bank’s key rate was cut by a quarter point to 2.5 percent, which was widely expected as inflation in the region has stayed relatively low and economic growth has been weak.But the future path of interest rates has become increasingly uncertain as policymakers face a seismic shift in Europe. In the past few days, European leaders have vowed to increase military spending by hundreds of billions of euros as they are no longer sure of their alliances with the United States.The plans, which include borrowing more, notably in Germany, have led to yields on European government bonds jumping higher, particularly on long-dated debt, and rising borrowing costs. The prospects of more spending combined with lower interest rates has helped to push stocks up, with Germany’s benchmark index, the DAX, at a record high. And the euro is also rallying against the U.S. dollar to its strongest level in four months, further easing inflationary pressures.This has reshaped the fiscal picture in Europe at a time when the central bank was grappling with the prospect of President Trump imposing tariffs on the region.There has been division among the members of the European Central Bank’s Governing Council about how much lower interest rates need to go. Overall, policymakers have signaled that they were aiming for a neutral rate, where policy would neither restrict nor boost the economy. But they said they would only know that the rate had been reached when they were at it.On Thursday, the central bank said monetary policy was “becoming meaningfully less restrictive,” a sign that policymakers are drawing closer to pausing interest rate cuts.With yields rising, traders are signaling that there will be just one more rate cut, potentially in April or June.The eurozone economy has been sluggish since late last year, and policymakers have substantially cut interest rates — lowering them by 1.5 percentage points since last summer — to support businesses and households with easier access to loans. The extent of economic weakness has taken policymakers by surprise as consumers have been slow to spend more in response to lower inflation. But the central bank is still forecasting the economy will pick up later this year.Still, the central bank forecast slightly slower growth than it did three months ago, anticipating lower exports and weak investment as businesses contend with uncertainty over trade policy. The eurozone economy is now forecast to grow 0.9 percent this year and 1.2 percent next year.Inflation in the eurozone slowed to 2.4 percent in February, data published earlier this week showed, down from 2.5 percent the month before. Inflation in the services sector, which has been frustratingly stubborn for policymakers, also slowed to 3.7 percent, from 3.9 percent in January. More

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      European Central Bank Cuts Interest Rates as the Economy Weakens

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      The bank has been lowering rates since June as inflation slowed, but other risks are growing, including the threat of higher tariffs promised by President-elect Donald J. Trump.The European Central Bank lowered interest rates on Thursday, the fourth cut this year amid growing concerns that the region’s economic outlook is darkening.Policymakers reduced the bank’s deposit rate by a quarter point, to 3 percent, in a move widely expected by investors. The bank, which sets rates for the 20 countries that use the euro, has been lowering rates since June as inflation slowed toward its target of 2 percent. In November, inflation averaged 2.3 percent across the region, slightly higher than in previous months as energy prices rose.“The disinflation process is well on track,” Christine Lagarde, the president of the central bank, said on Thursday at a news conference in Frankfurt. The bank forecast inflation to average 2.1 percent next year.Despite substantial progress on reining in inflation in recent years, other risks are accumulating. Europe faces the prospect of higher tariffs on its goods exported to the United States imposed during the second term of President-elect Donald J. Trump, and political turmoil in Germany and France, the bloc’s two largest economies, is adding to the uncertainty. Much of the past year has been spent warning that Europe needs to take drastic action to improve its competitiveness, but it is not clear where the leadership will come from to make the necessary changes. That increases the pressure on the central bank to support the economy with lower interest rates.As inflation has slowed in Europe and the United States, central bankers have eased their monetary policy stances. But in recent months, there are growing distinctions between the banks over how fast and how much they need to lower rates.Earlier on Thursday, the Swiss National Bank cut rates by a larger-than-expected half-point as its currency, considered a haven during times of geopolitical stress, has strengthened. Next week, the U.S. Federal Reserve is expected to cut rates after inflation data published on Wednesday added to confidence of slowing price growth. And the Bank of England is expected to hold rates next week, continuing its gradual approach to easing amid concerns the recent government budget will add to price pressures.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      ECB Cuts Interest Rates Again as Eurozone Inflation Slows

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      Policymakers who set interest rates for the 20 countries that use the euro have lowered rates in back-to-back meetings for the first time since 2011.The European Central Bank cut interest rates on Thursday for the third time in about four months, as inflation in the eurozone has cooled faster than expected and economic growth has been sluggish.Policymakers who set interest rates for the 20 countries that use the euro lowered their key rate by a quarter point, to 3.25 percent. Thursday’s decision came just five weeks after a cut at the bank’s previous meeting, and on a day that a report showed the eurozone’s inflation rate slowing to 1.7 percent in September, falling below the bank’s 2 percent target for the first time in more than three years.“The disinflationary process is well on track,” Christine Lagarde, the president of the central bank, said at a news conference in Ljubljana, Slovenia.The rate move was also influenced by weaker-than-expected economic data in the past few weeks. Whether it was the inflation data or surveys of economic activity, “it is the same story,” she said: “It’s all heading in the same direction — downwards.”After years of trying to force inflation down with high interest rates, central bankers around the world are walking a tightrope as they consider how quickly to cut interest rates. Lowering rates too fast could reignite simmering inflationary pressures, but keeping rates too high for too long risks slowing the economy substantially and inflation becoming too weak.In recent weeks, policymakers have suggested that rate cuts could be more aggressive as inflation has slowed significantly and economic growth has been lackluster. Last month, the U.S. Federal Reserve cut rates by a half-point, paving the way for quicker or bigger rate cuts in Europe, analysts said. On Wednesday, traders increased their bets that the Bank of England would pick up the pace of its rate cuts after data showed inflation in Britain fell to 1.7 percent in September, below the bank’s 2 percent target.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      European Central Bank, Citing Wage Growth, Keeps Rates Steady

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      Although inflation has eased, the eurozone’s central bank said that “domestic price pressures remain high.” Rates remain the highest in the central bank’s history.The European Central Bank on Thursday held interest rates steady for a fourth consecutive meeting, even as policymakers noted the progress that has been made in their battle against high inflation.The deposit rate remained at 4 percent, the highest in the central bank’s two-and-a-half decade history. Officials are weighing how soon they can bring interest rates down.“Interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution,” to returning inflation to the bank’s 2 percent target in a timely manner, the central bank said in a statement. “The Governing Council’s future decisions will ensure that policy rates will be set at sufficiently restrictive levels for as long as necessary.”Last month, the annual rate of inflation in the eurozone slowed to 2.6 percent, edging closer to the central bank’s target. But policymakers at the bank, which sets interest rates for the 20 countries that use the euro, have been cautious about cutting rates too quickly and reinvigorating inflationary pressures. Economists have warned that the path to achieving the bank’s inflation target is likely to be bumpy.These concerns played out in the latest inflation report, where the headline rate for February came in higher than economists had expected and core inflation, a critical gauge of domestic price pressure that strips out energy and food prices, was also higher than forecast.Traders had been betting that interest rates would be cut in June, but started to dampen their expectations after the inflation data was released. Those rate-cut expectations are likely to be bolstered again, as the central bank lowered its inflation forecasts on Thursday. It now sees inflation averaging 2 percent, meeting its target, next year and then falling to 1.9 percent in 2026.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      When Will the European Central Bank Start Cutting Rates?

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      Interest rate cuts could start as soon as April, investors say. But the eurozone’s central bank, which held rates steady on Thursday, has said it will probably wait longer.If what goes up must come down, then the urgent question on the minds of many in Europe is when will interest rates begin dropping? For months, rates have been set at the highest in the European Central Bank’s history.Despite the protests of the eurozone’s policymakers, investors have been betting that the central bank will cut rates quite soon — possibly in April. Traders figure rates must come down because inflation has slowed notably — it’s been below 3 percent since October — and the region’s economy is weak. By the end of year, the central bank will have cut rates by more than 1 percentage point, or between five and six quarter-point cuts, trading in financial markets implied.Policymakers, however, are trying to pull market opinion in the other direction and delay the expectations of rate cuts. Many of the central bank’s Governing Council are wary of declaring victory over inflation too soon, lest it settle above the bank’s target of 2 percent.On Thursday, the European Central Bank stuck to this outlook. It held interest rates steady, leaving the deposit rate at 4 percent, where it has been since September. The bank said rates were at levels that, “maintained for a sufficiently long duration, will make a substantial contribution” toward returning inflation to 2 percent in a “timely manner.”Benchmark interest rate in the eurozoneEuropean Central Bank’s deposit facility rate.

      Source: European Central BankBy The New York TimesInflation in the eurozoneYear-over-year change in consumer prices in the eurozone.

      Source: EurostatBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      Artificial Intelligence, Ukraine, China — The Big Buzz at Davos

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      C.E.O.s and world leaders gather in the Swiss Alps this year as war, trade risks and disruptive new technologies loom large.The topics on the mind of attendees at this year’s World Economic Forum in Davos, Switzerland, include artificial intelligence, the war in Gaza and the future of Ukraine.Denis Balibouse/ReutersThe meetings behind the meeting Thousands of global leaders have once again descended on snowy Davos, Switzerland, for the World Economic Forum’s annual meeting. The theme of this year’s event: “rebuilding trust.”But there are the public meetings, and then there are the real ones behind closed doors that the attendees are talking about most. These include discussions touching on U.S.-China tensions, the war in Gaza, artificial intelligence and the future of Ukraine.There is a kind of game that some C.E.O.s play with one another: How many public panels are you on, or how many times have you been in the Congress Center, the main hub for the forum’s big presentations? If the answer is zero, you’ve won. Top U.S. officials are set to appear on the main stage, including Secretary of State Antony Blinken and Jake Sullivan, the national security adviser. But speculation abounds about whom they’re seeing behind the scenes.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More