U.S. President Donald Trump’s so-called ‘Liberation Day’ trade tariffs are “madness, pure madness”, according to former Italian Prime Minister and Dean of the IE School of Politics Enrico Letta, who called the reciprocal levies “incomprehensible.”
Speaking to CNBC’s Silvia Amaro on the shores of Lake Como at the Ambrosetti Forum on Friday, he said Trump was exploiting fragmentation within the EU, adding it was crucial for the bloc to come together.
He further warned that the sweeping U.S. duties — which he described as a “crazy frontal attack on the world” — would be painful for economies and individuals within the U.S., as well as the nations targeted by the tariffs. He conceded that retaliatory measures could be needed to protect the European economy, but warned “if the reaction to Trump is to close Europe in a fortress, this reaction would be worse.”
CNBC has reached out to the White House for comment and is awaiting reply.
His comments broadly echo the sentiments of other European officials, after the bloc was hit with 20% of reciprocal tariffs on imports to the U.S. EU chief Ursula von der Leyen has signaled that the bloc would prepare countermeasures, if negotiations with Washington fail. France and Germany have both called for a coordinated response, with German Economy Minister Robert Habeck saying Trump would “buckle under the pressure.”
“And this pressure now needs to be unfolded, from Germany, from Europe in the alliance with other countries, and then we will see who is the stronger one in this arm wrestle,” Habeck said.
European economic growth could come under extensive pressure in the wake of the tariffs, which could push local producers to lower prices to defend their market share of exports. Deutsche Bank has calculated the hit to euro-area GDP from the tariffs will be around 0.4-0.8 percentage points, larger than the previous 0.3-0.4pp range forecast in the bank’s 2025-2026 GDP forecast.
The investment bank stated this is “broadly equivalent to economic stagnation through mid-2025,” while allowing that “euro-area growth forecast of +1.0% could remain broadly valid thanks for the initial growth benefits of the defence/infrastructure spending” kicked off by Europe’s ReArm initiative.