FRANKFURT: Euro zone consumers have changed their spending habits in anticipation of US tariffs, moving away from American products and reducing discretionary spending, a European Central Bank (ECB) study published on Monday found.
Consumers, supported by savings accumulated since the pandemic, have been cautious in making purchases as uncertainty over tariffs affected key parts of the bloc’s economy.
“In response to tariff-related concerns, consumers are altering their spending habits in notable ways”, the ECB said in its Economic Bulletin. Around 26% of survey respondents reported switching away from US products, while 16% said they had reduced overall spending.
The ECB noted that high-income households were more likely to avoid US goods, while lower-income households were more inclined to cut overall spending. Financial literacy also influenced these decisions. Most spending cuts affected discretionary items, while spending on necessities remained largely unchanged.
Some consumers have also adjusted their long-term inflation expectations upward, suggesting that the perceived impact of tariffs on inflation may not be entirely temporary. — Reuters
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