21 May 2025 – According to the European Commissions Flash Consumer Confidence Indicator, consumer confidence in the European Union and the eurozone both rose by 1.4 points in May, but remains below the long-term average. Once again, this example shows how bad tariffs and tariff conflicts are for the economy as a whole.
Europe: Consumers between hope and trade conflict
According to the European Commissions Flash Consumer Confidence Indicator, consumer confidence in the European Union and the eurozone both rose by 1.4 points in May – and thus more strongly than expected. Nevertheless, sentiment remains gloomy: at -14.5 points in the EU and -15.2 points in the eurozone, the indicator is still well below the long-term average.
Behind the slight recovery, however, is a complex geopolitical environment. In particular, the ongoing trade disputes with the US are weighing on consumer confidence. Sharp statements from US President Donald Trump and Treasury Secretary Scott Bessent caused additional irritation. Both accuse the EU of having a ‘collective action problem’ and rate the transatlantic trade conflicts as more serious than those with China – a statement that could complicate the ongoing negotiations.
A failure of the talks could have far-reaching consequences: US punitive tariffs of up to 20 per cent on all EU goods are on the table. Brussels has already prepared countermeasures. Although a moratorium is currently in place, the conflict cannot yet be described as permanently resolved.
Tariffs and tariffs disputes bad for the economy as a whole
Once again, it is clear how bad tariffs and tariff disputes are for the economy as a whole. And how they influence the global flow of goods. It is therefore hardly surprising that we are already hearing from various markets and even from steel mills that there is an undersupply of raw materials due to the increased tariffs.
EU CBAM: time to change direction
In view of another upcoming political vote on the EU Carbon Border Tax CBAM, one should therefore think carefully about what to do. It is the wrong moment to hold on to something where even at a political level there are voices saying that with CBAM they have run in the wrong direction just to avoid losing face. Real leadership is when you are prepared to change direction and admit mistakes.
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