The European Central Bank lowering interest rates may help offset the impact of tariffs on economic activity.

Economists of the European Central Bank stated in a blog post that import tariffs on European goods will weaken economic growth in the Eurozone and lower inflation, but the industries affected are most sensitive to changes in interest rates. These economists suggested that a more accommodative monetary policy can offset the pressure from slowing inflation and support economic activity. They mentioned that after a 1% decrease in exports to the US due to a tariff shock, consumer price inflation rate would decrease by about 0.1% after approximately a year and a half. They pointed out that in the industrial sector, although output sharply declines after tariffs increase, activity in this sector will expand strongly with loose monetary policy. "This indicates that monetary policy remains a strong tool to address the drag from falling inflation and increased trade barriers," they said.