U.S. GDP Growth Anticipated to Surpass 5% Despite EU Tariff Tensions

U.S. Commerce Secretary Howard Lutnick predicts that the U.S. GDP will grow by more than 5% in early 2026. However, he cautions the European Union against retaliating against President Trump's proposed tariffs related to Greenland, warning of a potential escalation in tit-for-tat tariffs.

U.S. Commerce Secretary Howard Lutnick voiced optimism on Tuesday about the U.S. economy, forecasting that GDP growth would surpass 5% in the first quarter of 2026.

Speaking at the World Economic Forum in Davos, Switzerland, Lutnick also cautioned the European Union against retaliating over President Donald Trump's proposed tariffs concerning Greenland, suggesting such actions could lead to further escalation in trade tensions.

According to Lutnick, the dynamic could descend into a 'tit-for-tat' series of tariff exchanges if Europe acts on its threats of retaliation.

(With inputs from agencies.)