ECB’s Guindos Says Trade War Would Be Extremely Bad: Telegraaf
(Bloomberg) -- European Central Bank Vice President Luis de Guindos said a trade war triggered by new US tariffs would significantly weigh on economic expansion, with the final outcome impossible to predict.
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“If a trade war breaks out, it is extremely negative for the global economy, particularly for growth but also for inflation,” he told Dutch newspaper De Telegraaf in an interview published Friday. “For instance, if you impose a 60% import tariff on goods from China, where there is already overcapacity, it leads to changes in trade flows and could even affect exchange rates. No one knows where it will end.”
The comments underscore how concerned officials are about renewed trade tensions after Donald Trump returns to the White House in January. The incoming US president renewed his tariff threat this week, writing on Truth Social that he’ll impose them if European Union nations don’t buy more American oil and gas.
Guindos also said:
US tariffs “could create a completely new situation that contradicts the lessons of the 1930s and the direction we’ve taken since the end of World War II”
“We are not responsible for trade policy. We can advise and explain that a trade war would be very damaging to the global economy and negative for everyone, and therefore it’s better to tread cautiously”
“The answer lies with the European Commission. Our role is to provide our perspective and manage the consequences”
“The demographic reality is that we live in an aging society. An aging society takes fewer risks and innovates less. That’s why targeted immigration is so important. It’s something Europe must consider from an economic perspective”
“We are confident that inflation in the Netherlands will gradually decline and that inflation in the eurozone will slowly move toward our 2% target”
Read More: ECB’s Nagel Sees Rates at Neutral in First Half of 2025: Focus
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