The Economic Consequences of Tariffs and Trade Policy Uncertainty

Christian Gréus, Philipp Heil, Niklas Potrafke, Ramona Schmid and Tuuli Tähtinen

No 79, EconPol Policy Brief from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Key MessagesIn the short term, a 10 percent import tariff is expected to reduce trade volumes and investment, while raising inflation and unemploymentEconomists across the EU expect tariffs to lower economic growth by 0.59 percentage points over the next five yearsMost experts report a high level of perceived trade policy uncertainty in both the EU and the USThe uncertainty is expected to cause further slowdowns in growth (-0.6 percentage points) and firm investment (-4.7%) in the medium term

Date: 2025
New Economics Papers: this item is included in nep-eec
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