By Paul Hannon
The members of the eurozone will stand together in support of retaliation against the U.S. if talks to resolve the trade conflict are unsuccessful, Ireland's finance minister said Friday.
Paschal Donohoe was speaking to reporters as head of the Eurogroup of finance ministers, after a meeting in Warsaw.
"I am absolutely certain we will work together," Donohoe said.
Members of the eurozone have different levels of reliance on trade with the U.S., and varying degrees of vulnerability should the dispute move beyond the trade in goods.
Some members favor measures that target U.S. exports of services and technology companies should President Trump press ahead with tariff increases that have been paused for 90 days.
However, those measures would expose Ireland to potentially severe economic harm, since it serves as the European headquarter for most of the large U.S. technology businesses.
Speaking alongside Donohoe, European commissioner for economy, Valdis Dombrovskis, said all options remain open should the European Union need to take countermeasures against the U.S.
Economists at the Commission calculate that, should the U.S. ultimately impose a 20% tariff on imports from the EU, economic output in the bloc would be 0.2% lower than otherwise through 2027, Dombrovskis said.
But they also calculate that higher tariffs on imports from a range of countries would do greater harm to the U.S. economy, with gross domestic product between 0.8% and 1.2% lower.
Should the tariffs become permanent and prompt countermeasures, the U.S. economy would be between 3.1% and 3.3% smaller than otherwise, and the EU economy 0.6% to 0.6% smaller, the economists estimated.
"There are many unknowns," he said. "The estimates give a broad feel for the scale of the impact."
European Central Bank President Christine Lagarde said policymakers will take the effect of tariffs into account. They meet next week, when investors expect a seventh rate cut since June.
Speaking at the same news conference, Lagarde said the central bank is monitoring developments in financial markets carefully, and their functioning has thus far been orderly.
Write to Paul Hannon at paul.hannon@wsj.com
(END) Dow Jones Newswires
Economists said the EU economy could be 0.5% to 0.6% smaller should the tariffs become permanent and prompt countermeasures. "Europe's Governments Pledge Unity in Tariff Fight -- Update," at 1136 GMT, misstated the percentage range.
(END) Dow Jones Newswires
April 11, 2025 10:25 ET (14:25 GMT)
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