Is Donald Trump back in the White House? Economic nightmare threatens Europe

European bankers, worried about a "suffocating” Europe's economy, are worried about what further damage Donald Trump could cause if he returns to the White House, notes Bloomberg.

The biggest worry is Trump's promise to impose tariffs on goods of 60 percent for China and up to 20 percent for other countries. Such measures would cause the biggest trade shock since the Smoot-Hawley Act, which deepened the Great Depression of the 1930s, and would exceed the impact of any measures taken by Trump during his first term as president.

That being said, some central bankers are concerned that Trump's election victory could make it harder to tame inflation without collapsing the economy.

Central banks from Frankfurt am Main to London and Stockholm are facing the darkest outlook since the start of the war in Ukraine. At the same time, Riksbank Governor Erik Thedin acknowledged the threats, but warned that it was too early to draw any conclusions.

Europe is weaker now than it was during Trump's tenure. In 2017, there were no wars in Ukraine or the Middle East. The eurozone posted its strongest annual growth in a decade and the UK had its best year since 2014.

Now even UK growth is slowing, Germany is heading for a second straight annual contraction, and French companies and households face spending cuts and tax rises worth around €60 billion.

The latest surveys of business activity were so gloomy that the European Central Bank delayed plans to cut interest rates.