Europe’s economy grew more strongly in the first three months of the year, only to see hopes for an ongoing recovery quickly squelched by US President Donald Trump’s trade war.

Gross domestic product in the 20 countries that use the euro grew 0.4% in the first quarter, improving on 0.2% growth in the last part of 2024, according to official figures released Wednesday.

But on April 2, just two days after the end of the quarter, Trump announced an onslaught of new tariffs on almost every US trading partner and hit goods imported from the European Union with a 20% tariff rate. That has led to widespread downgrading of Europe’s economic growth outlook for the year since its economy is heavily dependent on exports and the United States is its largest single export destination.

Although Trump has announced a 90-day pause on what he calls his “reciprocal” tariffs — so named because they are based on how he feels other countries have been treating the US — prospects that the EU can strike a bargain to reduce the 20% figure are highly uncertain.

Meanwhile, other tariffs — such as a 25% rate on steel and aluminum and on cars, both of them for all trading partners, including Europe — remain in place. The costs of tariffs are paid by the companies that import European goods such as cars and pharmaceuticals, which then have to decide whether to swallow the costs or pass them on to the consumer in the form of higher prices.

As a result, indicators of business and consumer optimism in Europe have fallen. The European Commission’s economic sentiment indicator sagged to 93.6 in March, its lowest level since December. That drop in sentiment is “another illustration of how the last four weeks of tariff tensions and uncertainty have entirely wiped out the tentative return of optimism in the eurozone,” said Carsten Brzeski, global head of macroeconomics at ING bank.

“Unless there are major changes in US trade policy, sentiment as well as economic activity in the eurozone will remain subdued over the coming months,” Brzeski said.

Before Trump’s announcement, hopeful signs had included a strong job market, with unemployment low at 6.1% and consumers beginning to spend more after several years of holding back because of inflation.

With inflation down to 2.2%, the European Central Bank has been lowering the cost of credit for consumers and businesses by cutting its benchmark interest rate seven times in its current easing cycle, most recently by a quarter of a percentage point on April 17.

On top of that, the German parliament has approved a €500 billion ($570 billion) investment fund that’s exempt from the country’s constitutional limits on debt. That decision by the incoming coalition has raised hopes of additional spending on pro-growth infrastructure over the coming years.

However, Trump’s tariffs have lowered expectations for Germany, the eurozone’s largest economy and its economic problem child. The outgoing government under Chancellor Olaf Scholz lowered its growth estimate for this year to zero after two previous years of declining output.

CNN
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An American detained in Belarus has been freed, Special Envoy for Hostage Response Adam Boehler and a second US official told CNN on Wednesday.

Youras Ziankovich was arrested in Moscow in 2021 and then was brought to Belarus’s capital Minsk, where he was accused of being part of a US-backed coup plot against Belarus’ strongman leader Alexander Lukashenko. The US State Department denied any such involvement.

Ziankovich had been declared wrongfully detained in February 2025. There was not a prisoner swap that led to his release, Boehler and the unnamed official said.

“No exchange,” Boehler told CNN Wednesday. “It really was an open mindedness to have a discussion, but I think it’s real hard for us to have discussions when people are holding Americans.”

Belarus – which has been isolated from the West – is interested in “trying to warm relations with the United States,” and “they know that President Trump is not going to do anything if they’re holding Americans.”

“We’ve made that clear” across the interagency, Boehler said.

Following his release from Belarusian detention, Ziankovich was turned over at the border with neighboring Lithuania to a team of US officials. He is expected to arrive back on US soil on Thursday, Boehler said.

Boehler said he had not yet spoken with Ziankovich, but said, “physically, it looks like he’s in good shape.”

“He’s quite happy to be in American hands,” he said.

US Secretary of State Marco Rubio confirmed the news on Wednesday, without naming Ziankovich.

“Thanks to @POTUS’s leadership, Belarus has released another wrongfully detained U.S. citizen. No president has done so much, so quickly, to keep Americans safe abroad,” Rubio posted on X.

According to Global Reach, an organization that advocated for his case, Ziankovich did not have access to State Department personnel until January 2025.

“I knew this day would come. It took 1,480 days, but he survived and is on his way home to me and to America,” his wife Alena Dzenisavets said. “I want to thank President Trump, Secretary Rubio, and Special Envoy Boehler and the SPEHA staff. I also want to express my appreciation to Rep. Morgan Luttrell and the nonprofits Global Reach and the James W. Foley Legacy Foundation for their help advocating for Youras.”

Ziankovich is not the first American to have been released from Belarus under the Trump administration.

Anastassia Nuhfer was released in January after being detained in December 2024. An unnamed American citizen, who was detained in September 2024, was released in mid-February. Two other political prisoners were also released at the time.

Ziankovich’s release comes a day after a second group of 10 Americans were released from detention in Kuwait in a goodwill gesture from the US ally. Boehler said the group would be back on US soil on Wednesday.

This story has been updated with additional details.

CNN
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A last-minute disagreement could derail the minerals deal that the United States and Ukraine were hoping to sign on Wednesday.

After weeks of intense negotiations that at times turned bitter and temporarily derailed Washington’s aid to Ukraine, it was expected that both sides would sign the deal.

Earlier Wednesday, Ukrainian Prime Minister Denys Shmyhal told Ukrainian television that the country’s economy minister Yulia Svyrydenko was on her way to Washington.

“We are finalizing the last details with our American colleagues. As soon as all the final details have been finalized, I hope that the agreement will be signed in the near future, within the next 24 hours,” Shmyhal told the Ukrainian Telemarathon.

Despite hopes that the deal would be finalized, sources familiar with the talks told CNN that there were differing views on the signing of the documents.

Shmyhal said earlier on Wednesday that Ukraine was ready to sign the deal, and then continue to work with the US to “finalize” two “technical documents” outlining the details of the deal at a later date.

A source familiar with the Ukrainian position said that while the US “offered” to sign all three documents on Wednesday, Ukraine believed more work was needed on the technical side.

Meanwhile, a source familiar with the US position told CNN that all three documents needed to be signed on Wednesday, and that the Ukrainians were trying to reopen terms which have already been agreed upon as part of the package.

US Treasury Secretary Scott Bessent said at a cabinet meeting on Wednesday afternoon that “the Ukrainians decided last night to make some last-minute changes.”

“We’re sure that they will reconsider that,” Bessent said.

“We’re ready to sign this afternoon, if they are,” he said, adding that the US had not made any changes to the deal that had been “agreed to on the weekend.”

The US and Ukraine have been trying to hammer out the natural resources agreement that would give Washington access to Kyiv’s untapped mineral riches in exchange for investment since US President Donald Trump returned to the White House in January.

Ukraine’s President Volodymyr Zelensky was expected to strike the deal during his trip to Washington in February – but the agreement was left unsigned when that visit was cut short following the contentious Oval Office meeting.

Among the key sticking point of the negotiations was the question of security guarantees – and whether the US would provide them as part of the deal. Trump initially refused that, saying he wants Ukraine to sign the agreement first and talk about guarantees later.

At that time, Zelensky described the draft agreement as asking him to “sell” his country. Ukrainian officials have since indicated they believed that US investment and the presence of American companies in Ukraine will make the US more interested in Ukraine’s security.

Shortly after the doomed White House visit, Trump ordered US aid to Ukraine to be suspended. While the assistance has since been restored, the episode became a major wakeup call for Ukraine’s European allies, who have pledged to step up their help to the country.

Trump has largely billed the agreement as Ukraine “paying back” for the aid the US has provided to Ukraine since Russia launched its unprovoked full-scale invasion of the country in February 2022.

The details of the agreement have not been made public. However, Shmyhal said on Sunday that the deal “will not include assistance provided before its signing.”

Speaking on Wednesday, Shmyhal described the deal as “a strategic agreement on the establishment of an investment partnership fund.”

“It is truly an equal and beneficial international agreement on joint investments in the development and recovery of Ukraine between the US and Ukrainian governments,” he added.

Under the deal, the US and Ukraine will create a joint investment fund in Ukraine with an equal contributions from both and equal distribution of management shares between them, Shmyhal said.

“The American side may also count new, I emphasize new, military aid to Ukraine as a contribution to this fund,” Shmyhal said.

Kyiv’s allies have long eyed the country’s mineral riches. Ukraine has deposits of 22 of the 50 materials classed as critical by the US Geological Survey.

These include rare earth minerals and other materials that are critical to the production of electronics, clean energy technologies and some weapon systems.

The global production of rare earth minerals and other strategically important materials has long been dominated by China, leaving Western countries desperate for other alternative sources – including Ukraine.

A memorandum of understanding prepared under the Biden administration last year said the US would promote investment opportunities in Ukraine’s mining projects to American companies in exchange for Kyiv creating economic incentives and implementing good business and environmental practices.

Ukraine already has a similar agreement with the European Union, signed in 2021.

This story has been updated with developments.