ECB’s Lagarde: Higher US Tariffs to Have a ‘Small Impact’ on European Growth

25 August 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank President Christine Lagarde said on Monday that the impact of higher US tariffs on European economic growth would be limited.

In an interview with Fox Business’s Mornings with Maria, Lagarde said that ‘[o]nce there is certainty and it [the US-EU trade deal] is not going to be challenged and renegotiated a hundred times, I think that enterprises are going to deal with it [higher tariffs].’

The economy was now ‘resilient’, according to Lagarde, who nevertheless also said that it was ‘not thriving.’

Economic growth was expected to return to potential in the coming years, she said.

‘Growth is relatively modest but resilient and on its way up, with the fundamentals such as consumption and investment looking good at the moment’, she added.

Inflation was now ‘at target’ and past shocks were now addressed.

‘There will be more shocks, we know that. But we are in a good position’, she said.

Asked about Federal Reserve Chair Jerome Powell’s speech at Jackson Hole, Lagarde characterised it as ‘very balanced’ in its assessment of the macroeconomic outlook.