Finance
Fresh tariffs to have muted inflation impact in Europe, ECB's Villeroy says
Published by Global Banking and Finance Review
Posted on January 20, 2026
1 min readLast updated: January 20, 2026
Quick Summary
US tariffs are expected to have a limited impact on European inflation, according to ECB's Francois Villeroy. Previous tariffs were mainly absorbed by US consumers.
New U.S. Tariffs Expected to Have Limited Effect on European Inflation
Impact of U.S. Tariffs on European Economy
PARIS, Jan 20 (Reuters) - Fresh tariffs by the U.S. would weaken economic growth for all parties involved but their impact on European inflation should be rather muted, French central bank chief Francois Villeroy de Galhau told Bloomberg TV in Davos on Tuesday.
Economic Growth Concerns
"On activity, tariffs are obviously bad news for everybody... including the U.S.," Villeroy said.
Previous Tariffs and Inflation
Last year's tariffs did not have an impact on euro zone inflation as they were mostly paid by U.S. consumers, and a similarly muted price outcome is likely in case of fresh duties, Villeroy added.
Expert Insights
(Reporting by Leigh Thomas; writing by Balazs Koranyi; Editing by Sharon Singleton)
Key Takeaways
- •US tariffs are expected to have a muted impact on European inflation.
- •French central bank chief Francois Villeroy comments on economic growth.
- •Previous tariffs were mostly absorbed by US consumers.
- •Fresh tariffs could weaken economic growth globally.
- •ECB's Villeroy discusses the impact at Davos.
Frequently Asked Questions about Fresh tariffs to have muted inflation impact in Europe, ECB's Villeroy says
1What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is often measured by the Consumer Price Index (CPI) or the Producer Price Index (PPI).
2What is monetary policy?
Monetary policy refers to the actions taken by a country's central bank to control the money supply, interest rates, and inflation to achieve macroeconomic objectives such as stable prices and economic growth.
3What is economic growth?
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real GDP.
