The White House’s protectionist policies could hit the U.S. harder than Europe in the short term, Banco Santander’s executive chair told CNBC on Thursday, as tariffs take a toll on domestic consumers.
“Tariffs [are] a tax. It’s a tax on the consumer.” Ana Botín said in an interview with CNBC’s Karen Tso in Brussels on the sidelines of the 2025 IIF European Summit. “Ultimately, the economy will pay a price. There will be less growth and there will be more inflation, other things equal.”
President Donald Trump has imposed — and at times suspended or revoked — a slew of tariffs on imports into the U.S. since his second administration began in January. He is seeking to promote domestic manufacturing and reduce trade deficits between the world’s largest economy and its commercial partners.
Botín is not alone in her warning regarding tariffs’ negative impact on the U.S., with many analysts also saying the duties could ultimately cause higher inflation and strain the wallets of U.S. consumers.
“On a relative basis, in the short term, Europe will be less affected than the U.S.,” Botín said Thursday.
Germany slams Trump’s 25% auto tariffs as bad news for U.S., EU and global trade
The imposition of blanket and country-specific duties — which include Wednesday’s news of a 25% tariff on all car imports into the U.S., effective from April 2 — have led to a number of retaliatory measures, including from the U.S.′ historical transatlantic ally, the European Union.
The bloc has also taken steps to bolster its autonomy through a package of proposals that could critically relax previously ironclad fiscal rules and mobilize nearly 800 billion euros ($863.8 billion) toward the region’s higher defense expenditures.
“European banks today are ready to lend more and support the economy more. We are strong. We have the capital,” Botín said. She also called for more “flexibility” in EU regulations that currently determine the “buffers” European lenders must hold on top of minimum capital requirements to bolster their resilience in the event of financial shocks.
The latest EU plans — and Germany’s steps to overhaul its long-standing debt policy to accommodate bolstered security spending — have boosted German and European defense stocks in recent weeks.
However, Germany is heavily reliant on its beleaguered auto sector — leaving the world’s third-largest exporter vulnerable to stark shifts in trade patterns and potentially exposed to recessionary risks as a result of U.S. tariffs, German central bank Governor Joachim Nagel warned earlier this month.
