Navigating Economic Growth Amid Trade War Threats

The Netherlands' economic growth is expected to accelerate unless U.S. tariffs and European retaliation initiate a trade war. Growth could reach 1.5% by 2025-2026, driven by domestic demand, but a trade war would reduce growth to 0.4% and raise inflation, the Dutch central bank warns.

Economic forecasts from the Dutch central bank indicate that the Netherlands is poised for notable growth unless global trade tensions escalate. The bank projects an economic expansion of 1.5% in both 2025 and 2026, driven by robust domestic demand and investments.

However, these positive predictions are contingent on averting a full-scale trade conflict. The central concern stems from potential retaliatory tariffs between the U.S. and Europe, ignited by previous tariff threats from U.S. President Donald Trump. Such a scenario would severely constrain international trade.

If a trade war materializes, the Dutch economy could see its growth stifled to a mere 0.4% by 2026, compounded by increased unemployment and reduced consumption. This would also elevate inflation rates further, exacerbating the Netherlands' existing inflation challenges.

(With inputs from agencies.)