ECB’s Panetta Says Tariffs Have Damaged the US More Than Others

Alessandra Migliaccio and Sonia Sirletti

Sat, February 21, 2026 at 7:24 PM GMT+9 3 min read

Photographer: Alessia Pierdomenico/Bloomberg

(Bloomberg) – The US economy has borne most of the burden of tariffs imposed by President Donald Trump, according to European Central Bank Governing Council member Fabio Panetta.

Photographer: Alessia Pierdomenico/Bloomberg

“Foreign exporters seem to have shouldered a portion of it, estimated at around 10%,” he said Saturday in Venice. “Initially, the impact was absorbed by US firms’ profit margins, and was then partially passed on to consumers, who now bear about half of it.”

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Speaking at an annual Assiom-Forex event, Panetta highlighted that “overall, tariffs are estimated to have contributed just over half a percentage point to inflation, which remains above the Federal Reserve’s target.”

Trump suffered a setback on Friday when the Supreme Court struck down the bulk of the levies he imposted last year saying he exceeded his authority by invoking a federal emergency-powers law. The president responded by imposing a 10% global tariff and pledging a raft of investigations that could allow him to enact more import taxes.

Panetta also noted that tariffs have led to a significant geographical reconfiguration of trade flows. This includes a contraction of US imports from China, an increase in US imports from third countries such as Mexico, Vietnam and Taiwan, and a strengthening of China’s presence in alternative markets.

“Today the world is tightly interdependent — no country can prosper for long by isolating itself,” Panetta said.

In response to the SCOTUS announcement, Trump defended his tariff program saying it is essential not only to draw manufacturing back to the US, but as a foreign policy tool.

“The US still holds a dominant position in critical areas such as technology, military capacity, and international finance,” and “for many countries, disengagement from the US ecosystem is simply not a viable option,” Panetta said.

Yet the US also needs Europe, which “absorbs one fifth of US goods exports and 40% of its service exports, generates one-third of the foreign profits of US multinationals, and holds a substantial amount of US government securities,” he said.

Separately, Panetta, who also heads the Bank of Italy, discussed the euro area, which he said has strong institutions but suffers from incomplete economic and financial integration and the need for the introduction of a common safe asset.

“A European sovereign bond would enable European public goods to be adequately financed and, at the same time, provide investors a safe and liquid benchmark asset, thereby boosting the Union’s financial integration,” he said, reiterating earlier comments.

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Panetta also talked about inflation, saying risks are significant both to the upside and downside, which means that “monetary policy must keep a flexible approach, anchored to the medium-term outlook and based on a comprehensive assessment of the data and their implications for inflation and growth.”

Regarding Italy, the central banker said the country’s economy 0.7% expansion last year was thanks to domestic demand and investment, particularly in the second half.

–With assistance from Antonio Vanuzzo.

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