The European Central Bank published an ECB Blog analysis using its Consumer Expectations Survey to assess how euro area consumers might react if the United States imposed trade tariffs on EU products and the EU retaliated. The results indicate a strong willingness to substitute away from US products and services, with responses pointing to a preference-driven shift that goes beyond standard price-elasticity effects. In March 2025, respondents were randomly assigned hypothetical tariff increases of 5%, 10% or 20% and asked (on a 0–100 scale) how willing they were to buy non-US alternatives. The median substitution score was 80, and around 44% said they would shift spending away from US products largely irrespective of the tariff rate because they preferred to switch away rather than because of the price increase; this group’s median score was 95 across all tariff scenarios. Willingness to substitute increased with household income and with a higher share of discretionary spending, while the share of respondents citing preference as the main driver rose with income and the importance of price declined.
European Central Bank 2025-04-30
European Central Bank research finds euro area consumers would switch away from US products in response to potential trade tariffs
The European Central Bank's Consumer Expectations Survey shows euro area consumers strongly prefer substituting away from US products if trade tariffs are imposed, with a median substitution score of 80. About 44% of respondents indicated a preference-driven shift, largely independent of tariff rates, with a median score of 95. The willingness to substitute correlates with higher household income and discretionary spending.