FRANKFURT, Germany (AP) — The European Central Bank cut interest rates Thursday for the seventh time to counter worries about economic growth fueled by President Donald Trump’s tariff onslaught.
The bank’s move should support economic activity in the 20 countries that use the euro currency by making credit more affordable for consumers and businesses.
ECB President Christine Lagarde said at a post-decision news conference that “the major escalation in global trade tensions and the associated uncertainty will likely lower euro area growth by dampening exports."
"And it may drag down investment and consumption," she said.
The bank’s rate-setting council decided at a meeting in Frankfurt to lower its benchmark rate by a quarter percentage point to 2.25%. The bank has been steadily cutting rates after raising them sharply to combat an outbreak of inflation from 2022 to 2023.
Now that inflation has fallen, growth worries have taken center stage. The economy in the 20 countries that use the euro grew a modest 0.2% in the last three months of 2024. Inflation was 2.2% in March, close to the bank’s target of 2%.
The cut was widely expected by analysts given the sudden shadow cast over the eurozone’s growth outlook by Trump’s April 2 announcement of unexpectedly high tariffs, or import tax, on goods from other countries starting at 10% and ranging as high as 49%. The European Union faces a 20% tariff.
At the bank’s last meeting on March 6, Lagarde had raised the possibility of an upcoming “pause” in the bank’s series of rate cuts. But that option was practically eliminated by Trump’s announcement.
The bank’s benchmark steers rates throughout the economy. Lower interest rates make it less expensive to borrow money and buy goods ranging from homes to new factory equipment. That supports spending, business investment and hiring.
Trump has suspended the tariffs for 90 days, but the possibility of the 20% tariff rate he has proposed for Europe left economists and policymakers concerned that the higher costs will weigh on business activity — and lead to slower growth or even a recession if he carries through. The U.S. is Europe’s largest trade partner with some 4.4 billion euros ($5 billion) in goods and services crossing the Atlantic every day in both directions.
Uncertainty is another factor that could slow the economy since Trump’s pause for negotiations leaves it unclear where the tariff rate will actually settle. Businesses may hold off on making decisions if they don’t know what their costs will be.
European Union officials have offered Trump a “zero for zero” option that would see both sides dropping tariffs on industrial goods including cars. But Trump has said that won't be enough, and raised the possibility of Europe importing large additional quantities of US liquefied natural gas.
Economists at Berenberg bank think that by midyear some of the tariffs will be negotiated away, ending at around 12%. However that is still around 10 percentage points higher than average tariffs before Trump. in addition to that comes a separate 25% tariff on autos, aluminum and steel from all countries. The auto tariff will hit Europe’s prominent auto industry hard - and Trump has indicated it is is not up for negotiation.
Lagarde said the “cloud of uncertainty” over tariffs meant that rate decisions going forward would have to be taken on a meeting by meeting basis depending on what happens during the 90-day tariff truce.
“There is a negotiation which is ongoing, players around the tables have stated their position, proposals have been made, at least on one side, but all of that could change," she said.
"There’s a degree of unpredictability which adds to the uncertainty.”
President of European Central Bank, Christine Lagarde, arrives for a press conference after an ECB's governing council meeting in Frankfurt, Germany, Thursday, April 17, 2025. (AP Photo/Matthias Schrader)
FILE - The European Central Bank rises silhouetted against the blue sky, in Frankfurt, Germany, Thursday, March 6, 2025. (Boris Roessler/dpa via AP, File)
CHARLESTON, W.Va. (AP) — West Virginia's Supreme Court on Monday declined to answer a federal court's question in an appeal in a landmark lawsuit over whether the distribution of opioids can cause a public nuisance.
The 3-2 opinion returns the case to the 4th U.S. Circuit Court of Appeals in Richmond, Virginia.
It's been nearly three years since a federal judge in Charleston ruled in favor of three major U.S. drug distributors who were accused by Cabell County and the city of Huntington of causing a public health crisis by distributing 81 million pills over eight years in the county. AmerisourceBergen Drug Co., Cardinal Health Inc. and McKesson Corp. also were accused of ignoring the signs that Cabell County was being ravaged by addiction.
U.S. District Judge David Faber in Charleston said West Virginia’s Supreme Court had only applied public nuisance law in the context of conduct that interferes with public property or resources. He said to extend the law to cover the marketing and sale of opioids “is inconsistent with the history and traditional notions of nuisance.”
Last year the appeals court in Richmond, Virginia, sent a certified question to the state Supreme Court, which states: “Under West Virginia’s common law, can conditions caused by the distribution of a controlled substance constitute a public nuisance and, if so, what are the elements of such a public nuisance claim?”
Had the state justices ruled that opioids distribution can cause a public nuisance, the case would have returned to the 4th Circuit anyway. Had the West Virginia court found that opioids can’t cause a public nuisance, the appeal would have ended, the 4th Circuit has said.
Instead, a majority of the West Virginia justices refused to get involved.
Justice Haley Bunn delivered the opinion of the West Virginia Supreme Court. Justice Beth Walker, who is retiring next month, issued a separate opinion. Chief Justice Bill Wooton was joined in a dissenting opinion by Circuit Judge Tera Salango. Salango and Circuit Judge Andrew Dimlich heard the case on temporary assignment after two other justices disqualified themselves.
Paul Farrell Jr., an attorney representing the plaintiffs, said Monday he was disappointed that the justices declined to answer the legal question.
“The fight isn’t over," Farrell said. "There’s still a long way to go. We continue on our path to seek justice.”
Farrell said the appeals court still must address a combination of factual and legal issues.
A Cardinal Health spokesperson declined to comment on Monday’s ruling. Emails seeking comment from AmerisourceBergen and McKesson weren’t immediately returned.
During arguments earlier this year before the state Supreme Court over the certified question, Steve Ruby, an attorney for the companies, called the plaintiffs’ arguments to grant the public nuisance “radical” and that, if granted, it would “create an avalanche of activist litigation.”
Thousands of state and local governments have sued over the toll of opioids. The suits relied heavily on claims that the companies created a public nuisance by failing to monitor where the powerful prescriptions were ending up. Most of the lawsuits were settled as part of a series of nationwide deals that could be worth more than $50 billion. But there wasn’t a decisive trend in the outcomes of those that have gone to trial.
The appeals court had noted that the West Virginia Mass Litigation Panel, which works to resolve complex cases in state court, has concluded in several instances that opioid distribution “can form the basis of a public nuisance claim under West Virginia common law.”
In his 2022 decision, Faber also said the plaintiffs offered no evidence that the defendants distributed controlled substances to any entity that didn’t hold a proper registration from the U.S. Drug Enforcement Administration or the state Board of Pharmacy. The defendants also had suspicious monitoring systems in place as required by the Controlled Substances Act, he said.
In 2021 in Cabell County, an Ohio River county of 93,000 residents, there were 1,059 emergency responses to suspected overdoses — significantly higher than each of the previous three years — with at least 162 deaths.
The plaintiffs had sought more than $2.5 billion that would have gone toward opioid use prevention, treatment and education over 15 years.
FILE - Signs are displayed at a tent during a health event on June 26, 2021, in Charleston, W.Va. (AP Photo/John Raby, File)
