ECB’s Lagarde calls for EU-US dialogue to avoid trade war fallout

European Central Bank (ECB) President Christine Lagarde urged for dialogue rather than retaliation in response to potential US trade tariffs, calling on the European Union (EU) to engage with Washington directly rather than resorting to countermeasures.

In an interview with the Financial Times published Thursday, Lagarde stressed the importance of avoiding a trade war, warning it could lead to a damaging “tit-for-tat” scenario where no party benefits. She suggested a more cooperative approach, such as pursuing joint purchasing agreements with the US, as a preferable alternative.

Lagarde also cautioned that trade conflicts could harm global economic growth, saying, “This can be in nobody’s interest, neither for the United States nor for Europe.” While acknowledging the potential short-term inflationary impact of tariffs, she refrained from estimating their long-term economic effects.

Her comments come amid growing concerns over US President-elect Donald Trump’s repeated threats of tariffs and their potential economic fallout.

Attribution: Bloomberg

Subediting: Y.Yasser