US Tariffs Destabilizing Dutch Economy
In its semi-annual Financial Stability Report, DNB attributed the sharp rise in volatility and risk on international financial markets to the trade war unleashed and import tariffs imposed by U.S. President Donald Trump.
The bank highlighted that uncertainty surrounding trade, international cooperation, and government budgets has surged in recent months, posing a growing threat to the Dutch economy.
"The heightened uncertainty surrounding these import tariffs is damaging global growth prospects and directly impacts the Dutch economy," the report said. "The likelihood of economic contraction and elevated inflation is increasing, particularly over the medium term."
DNB noted that geopolitical and economic tensions are translating into greater instability across financial markets worldwide.
Investors, the bank said, are increasingly concerned about the impact of tariffs on global growth and corporate profitability.
These concerns are amplified by broader uncertainty over U.S. economic policy, which has led to "a noticeable decline in confidence in traditionally 'safe' assets such as U.S. Treasury bonds and the dollar," said the central bank. "Many investors are now shifting towards alternative currencies and gold."
The central bank stressed that international cooperation is critical in addressing such global challenges, particularly for a small and open economy like the Netherlands.
DNB urged Dutch and European policymakers to remain actively engaged in multilateral forums and to support cross-border collaboration.
In addition, the bank called for the European Union to increase its strategic economic autonomy, citing the development of a European payment instrument, such as a digital euro, that can be used across the continent.
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