America First works for Europe: Trump's tariffs are keeping prices down in the EU.

Economists from the financial group Nomura claim that the trade policy of U.S. President Donald Trump may lead to a decrease in inflation in Europe. One reason is the redirection of Chinese exports from the U.S. to Europe due to high American tariffs, which may keep prices down. Additionally, the strengthening euro creates additional pressure on inflation in the EU, as a stronger currency makes imports cheaper and lowers prices for consumers.

Expectations of the negative impact of Trump's tariffs have caused a drop in energy prices, such as oil and natural gas. American companies are already warning of price increases due to tariffs. According to a study by the Federal Reserve Bank of New York, even those companies that are not subject to tariffs may raise prices in line with their foreign competitors.

George Buckley, the chief economist at Nomura, explains that the impact on European inflation will be lower than that on American inflation. However, lower inflation in Europe may provide more room for lowering interest rates to support the economy. Experts from the International Monetary Fund predict that reducing borrowing costs in the U.S. will be challenging if stimulus for their economy becomes necessary.