The Eurozone’s economy has surprised analysts by growing at a faster rate than expected, despite global headwinds and ongoing economic challenges. However, the United States, previously seen as a standout performer among the world’s largest economies, now faces the real threat of recession, as official data shows the economy shrank during the first quarter of 2025.

While the Eurozone economy has been boosted by stronger-than-anticipated performances in sectors including manufacturing and services, the US is still stuggling to come to terms with the fallout from President Donald Trump’s aggressive trade policies, especially his ongoing trade war with China and other partners. Economists had anticipated slower growth for the Eurozone this year, but a combination of resilient consumer spending and a rebound in exports enabled the monetary union to defy expectations. The European Central Bank (ECB), led by President Christine Lagarde, had anticipated a modest 0.5% growth rate for the region, but the latest figures show that the economy expanded by a solid 0.9% in the first quarter.

Such unexpected strength is likely down to a number of factors, including robust demand from emerging markets and a more stable global trading environment in the first few months of the year.

In addition, EU member states have been benefiting from greater fiscal cooperation, which has helped cushion the impact of external shocks such as supply chain disruptions and rising energy prices.

In contast, the United States is now at risk of a prolonged downturn. The most recent data revealed that the US economy contracted by 0.3% in the first quarter of 2025, marking the first economic shrinkage in three years.

The contraction is largely attributed to an influx of imports, as businesses rushed to bring in goods before President Trump’s tariffs went into full effect.

This surge, designed to mitigate the impact of tariffs, has created a temporary imbalance, resulting in a sharp fall in domestic production. This drop in output has led to investor concerns, with stock markets reacting negatively to the news.

Analysts now fear that the US may be headed for a full-blown recession unless significant changes are made to the current tariff policies.

Richard Flynn, an investment manager at Charles Schwab, told The Telegraph: “At this point, it’s difficult to imagine how a recession could be prevented, aside from substantial further backpedalling on tariff policy.”

His comments reflect the growing sentiment among economists that the US economy is entering a period of stagnation, with the risk of deeper contraction if additional tariffs are imposed.

Mr Trump himself denied responsibility for the sluggish economy in a typically bullish message on Truth Social, insisting: "This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th.

"Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers.

"Our Country will boom, but we have to get rid of the Biden 'Overhang.'

"This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!"