“With two per cent more trade in the single market, the effects of tariffs are reduced to zero.” Lagarde pushes Draghi report

Brussels – The tariffs decreed by the United States on European goods will undoubtedly have repercussions, but the EU has, in the Single European Market, the tool to nullify the effects of the 15 per cent trade tariffs. These are the words of Christine Lagarde, the President of the European Central Bank, who is relaunching trade between EU Member States to change the flow of goods and get out of an otherwise damaging situation. 

“ECB staff analyses show that a mere 2 per cent increase in intra-euro area trade would be enough to offset the loss of exports to the United States caused by the tariff increase,” Lagarde explained at the 4th Bank of Finland International Monetary Policy Conference. This element alone is for the Eurotower president “a convincing reason to implement the reforms identified in the recent reports by Mario Draghi and Enrico Letta” for, respectively, competitiveness and the single market, “in particular by simplifying burdensome regulation, completing the single market, and creating a genuine European capital market.”

https://www.eunews.it/2025/06/17/lagarde-trump-30-milioni-posti-di-lavoro/ 

From Lagarde comes a political recipe that, moreover, is the same as that identified by the President of the European Commission, Ursula von der Leyen, who, before bending to the will of Member States and signing a trade agreement with the US at any cost, had identified the single market as the answer to trade tensions. 

Focusing on the single market by removing remaining barriers is also the best way to secure EU growth. Lagarde warns that “the expected cumulative impact of tariffs and uncertainty on growth is about 0.7 percentage points between 2025 and 2027“, or, on average, just over 0.2 percentage points less per year. By stimulating domestic demand and consumption, on the other hand, production and national economies would be able to take cover and try to zero in on expected losses for the European system.