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US Trade Policy and Brexit Pose Major Risks for European Economy - EU Commission

© AFP 2021 / ARIS MESSINISA picture taken on July 11, 2015 in Athens shows euro coins and banknotes with the map of Europe
A picture taken on July 11, 2015 in Athens shows euro coins and banknotes with the map of Europe - Sputnik International
The statement by the European Commission comes as Washington is engaged in trade rows with not only the bloc, but with China, India, and other countries as well.

Brussels stated on Wednesday that it was reducing economic growth forecasts for the EU, emphasising the risk posed by "any further escalation of trade tensions".

"Overall, the euro area economy is set to continue expanding this year and next, with annual growth forecast to slow from 1.9% in 2018 to 1.2% in 2019 (1.4% in the EU) before firming up at 1.4% in 2020 (1.6% in the EU) helped by a higher number of working days", the forecast read.

According to the commission, "the outlook for trade and investment continues to be clouded by protectionism and uncertainty".

Earlier this month, Washington also published a list of EU products worth $4 bln that could face additional US tariffs in the wake of the ongoing dispute between Boeing and Airbus.

In the meantime, US President Donald Trump said he wouldn't introduce new tariffs against Beijing, but stressed that the US won't be removing trade tariffs on Chinese goods for now.

No Deal - No Growth

The European Commission also underscored that the possible withdrawal of the UK from the bloc without an appropriate deal on exit conditions could undermine prospects for the European economy.

"On the domestic side, given the purely technical assumption of status quo in terms of trading relations between the EU27 and the UK, a 'no deal' Brexit remains a major source of risk", the forecast read.

The UK was supposed to leave the European Union in late March, but the British Parliament refused to back the withdrawal agreement proposed by Prime Minister Theresa May. After several delays, the deadline for London is now 31 October.

At the same time, British PM hopeful Boris Johnson, who could replace Theresa May this month, refused to rule out the no-deal Brexit option, even if that would mean a suspension of the UK Parliament.

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