Goldman Sachs: Trump's tariffs are more bark than bite, with limited impact on Eurozone GDP.

Economists at Goldman Sachs pointed out that the latest 10% tariff policy threatened by U.S. President Donald Trump could lead to a reduction of about 0.1 percentage points in the Gross Domestic Product (GDP) of the eurozone. Trump announced last Saturday that he would impose tariffs on European countries that supported Greenland when the U.S. expressed its intent to acquire the semi-autonomous territory of Denmark. The specific countries include Denmark, Norway, Sweden, France, Germany, Finland, the UK, and the Netherlands. The Goldman Sachs team estimated that a 10% tariff would lead to a decrease of 0.1% to 0.2% in the actual GDP of the affected countries through reduced trade channels. The team further analyzed that if progressive retaliatory tariff measures were taken, Germany would endure the most significant impact with an actual GDP decline of about 0.2%; if comprehensive tariffs were imposed, the actual GDP decline could expand to around 0.3%. The team, including Sven Jari Stehn, wrote in their report, "If there is negative confidence shock in the market or financial market volatility intensifies, the actual economic impact could far exceed the current estimated level." Global financial markets have experienced significant turmoil due to the escalating trade tensions - European stock markets and U.S. stock index futures fell in sync on Monday, while traditional safe-haven assets like gold saw a significant increase in prices. However, some market strategists point out that since the global economic fundamentals remain stable, the negative impact of trade frictions on European stock markets may only be short-term volatility. Goldman Sachs economists noted that the implementation of tariffs is "highly uncertain"; the EU may first press the pause button on the U.S.-EU trade agreement and then impose retaliatory tariffs or even initiate so-called "countermeasures." They anticipate that the UK will still choose to mediate with the Trump administration, as it did last year. According to sources, the EU is currently discussing the issue of imposing tariffs on $930 billion (approximately $1.08 trillion) worth of U.S. goods, while also evaluating other retaliatory measures options beyond tariffs. However, the EU plans to prioritize seeking solutions through diplomatic channels to prevent further escalation of trade disputes. Goldman Sachs economists further pointed out that the impact of the relevant policies on inflation is "very limited," and they predict that, due to weakened GDP growth prospects, major central banks may take rate-cut measures to boost the economy.