The European economy recorded modest growth at the end of last year, overcoming higher U.S. tariffs
ByDAVID MCHUGH AP business writer
January 30, 2026, 6: 06 AM
FRANKFURT, Germany — The European economy recorded modest growth at the end of last year, pushing past turmoil over higher U.S. tariffs. But now the economy faces another hurdle: a stronger euro against the dollar that could weigh on exports.
Growth in the 21 countries that use the shared euro currency came in at 0.3% for the last three months of 2025, matching the figure from the third quarter, the EU statistics agency Eurostat reported Friday. Growth compared with the fourth quarter of 2024 was 1.3%.
Moderate growth has defied recession fears from earlier in the year, when US President Donald Trump threatened to raise tariffs to levels that could have devastated trade. Talks settled on a 15% cap on U.S. tariffs, or import taxes, on goods from the European Union. The higher tax isn’t great for business — but the certainty resulting from the deal let companies at least go ahead and plan.
That assurance was dented after the quarter ended when Trump on Jan. 17 threatened EU member countries with higher tariffs for supporting Greenland against his calls for a U.S. takeover. Trump later withdrew the threat.
European services businesses — a broad category ranging from hairdressers to medical treatment — have shown moderate growth according to the S&P Glob