ECB’s Escrivá: Inflation Impact of Tariffs Will Depend on Negotiations, Among Other Things

17 April 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member José Luis Escrivá said on Thursday that the impact of US tariffs on inflation in the euro area would depend on negotiations with the affected countries, among other factors.

In a video posted by the Banco de España, which he heads, Escrivá said that ‘one of the risks we had been focussing on has been materialising’, meaning US tariffs on European goods.

‘This has the potential of generating significant effects on economic activity and on prices’, he said.

However, it was still hard to say what the net impact would be on inflation, he said.

‘It will depend on how negotiations play out, among other things’, he said.

High uncertainty would probably have an adverse effect on the global economy and also the euro area, he said, but the extent of such impact was hard to estimate for the moment.

Inflation, which stood at 2.2% in March, was ‘very close’ to the ECB’s medium-term 2% objective, according to Escrivá.

The ECB had lowered rates by 25bp because inflation continued to moderate as expected especially in services, which had been persistently high, he said.