EU Warns of Recession Risk if U.S. Imposes 50% Tariffs on Trading Partners

Dutch bank ING has issued a dire warning: Europe could descend into a “full-blown recession” if U.S. tariffs escalate over 50%, especially affecting automotive, pharma, and luxury sectors.

Economists argue that uncertain trade dynamics are already damping investment, while businesses face sudden cost increases. As EU Trade Commissioner Šefčovič negotiates, Europe has also prepared a €95 billion retaliatory tariff package targeting U.S. imports—but postponed implementation initially.

Should negotiations break down, mutual tariffs and market uncertainty would risk tipping both economies into slowdown. Pressure is on for a swift, protective agreement before July 9, with Europe bracing for economic turbulence.