Higher trade tariffs coming from the U.S. are not what the euro zone needs right now following several years of a promising recovery, a high-ranked European official told CNBC.
The 19-member region that shares the single currency has been growing at a gradual pace over the last two years following a sharp downturn due to the sovereign debt crisis of 2011. But the current threat of higher tariffs with key trade partners, especially the U.S., could prove a challenge for the euro area’s fragile recovery.
“This is a major risk that we see for the global economy and certainly for the relationship between the U.S. and Europe,” Mario Centeno, who heads the group of 19 finance ministers for the euro area, told CNBC Wednesday, speaking on increased duties coming from the U.S.
The region grew at a rate of 2.4 percent in 2017 — an expansion not seen in about a decade. However, the economic momentum has cooled down in the start of 2018 — something that higher trade barriers could dampen further.
“We don’t know exactly how it will evolve, but I agree with those that see this process as an unnecessary test to the economic recovery, and actually to the (economic) expansion that our economies were experiencing,” Centeno said.
He added that right now it is important to work toward a limit to the tariffs both in scope and duration.