ECB’s Villeroy: Trump’s 90-Day Tariff Pause ‘Beginning of a Return to Economic Reason’

9 April 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Wednesday that the decision of the US administration to pause the increase in tariffs for 90 days was a sensible call to make.

In an interview with French TV France 2 TV, Villeroy, who heads the Banque de France, said that this was ‘the beginning of a return to economic reason and a bit of realism.’

The unpredictability that had been characterising the US administration for three months was now ‘playing in the right direction and we have a less bad piece of news.’

‘Protectionism is bad policy that will firstly play against the US economy with higher inflation – American consumers will pay more for their cars, their iPhones, clothes, anything imported — and significantly less growth’, he said. ‘There will be other consequences in Europe, but it’s firstly negative for the US.’

The ECB was winning the battle against inflation as inflation in the Eurozone was now closer to 2% inflation, according to Villeroy.

‘We don’t expect any deviation from this 2% objective because disinflation was much more advances in Europe and France and also because Europe will not implement tariffs as strong as the US, the US is penalising itself’, he said.

Villeroy praised the EU’s retaliatory decision as it had ‘kept cool heads and unity’ when reacting to the announced tariffs.

‘If the EU has to take countermeasures, they will only hit us, while what Trump announced is tariffs against every country, so it weighs much more on prices in the US’, he said.