US Tariffs Drive Steep Drop in EU Exports for Second Consecutive Month
US tariffs have driven a steep decline in EU exports for the second straight month, shrinking the bloc's trade surplus by 60%. The data underscores the mounting economic cost of the transatlantic trade dispute for European exporters.
The European Union's trade surplus shrank by 60% as US tariffs drove a steep drop in exports to America for the second consecutive month, according to new data. High-value sectors including automobiles, machinery, and chemicals have been hit hardest, with exporters struggling to offset lost US demand in other markets.
The trade data compounds a gloomy picture for European industry. Germany's BDI industry lobby warned this week that German industry faces stagnation in 2026, while producer prices fell 0.2% year-on-year in March, signalling persistent deflationary pressure in the bloc's largest economy. Together, the figures strengthen the case for further European Central Bank rate cuts.
With transatlantic trade negotiations showing little progress, the drag on export-reliant eurozone economies risks intensifying through the year. Markets are watching for any diplomatic breakthrough that could ease tariff burdens, as well as ECB guidance on the pace of further monetary easing in response to weakening external demand.
