ECB's Panetta: US Bears Bulk of Tariff Burden, Inflation Elevated

European Central Bank Governing Council member Fabio Panetta stated on February 21, 2026, that the US economy has absorbed the majority of the costs from President Donald Trump’s tariffs. Speaking at an event in Venice, Panetta estimated that US consumers now bear approximately half of the financial burden, while foreign exporters shoulder only around 10%. He added that the levies have contributed just over half a percentage point to US inflation, which remains above the Federal Reserve’s target. Panetta highlighted a significant geographical shift in trade flows, noting a contraction in US imports from China alongside increased shipments from Mexico, Vietnam, and Taiwan. He emphasized that global interdependence renders isolationist policies ineffective, citing Europe's role in absorbing one-fifth of US goods exports. Regarding monetary policy, Panetta advocated for a flexible approach anchored to medium-term data due to persistent upside and downside inflation risks. He also reiterated the need for a common European safe asset to deepen financial integration.