European Central Bank President Christine Lagarde told CNBC on Wednesday that Europe must “be prepared” and anticipate potential trade tariffs by new US President Donald Trump.
She said the fact that Trump did not impose sweeping tariffs on the first day of his presidency was a “very smart approach…because sweeping tariffs don’t necessarily give you the results you expect.”
As such, she said she expects Trump’s tariffs to be “more selective and focused.”
“What we need to do here in Europe is prepare and anticipate what will happen in order to respond,” she told CNBC’s Karen Tso at the World Economic Forum in Davos.
Trump has threatened to impose tariffs on goods imported into the United States from the European Union, and has repeated those claims since his inauguration on Monday, telling reporters that the European Union has been “very bad for us.” Definitions.”
Valdis Dombrovskis, the EU Commissioner for the Economy, on Wednesday told CNBC that if there was a need to defend the bloc’s economic interests, the EU would do so. Respond “in a proportionate manner.”
‘One way to respond’ to US trade policy
Lagarde also called for the removal of barriers to intra-European trade, noting that despite aspirations to create a single market, barriers still exist that sometimes prevent the unhindered movement of goods and services.
“I think it’s one of the points that Ursula von der Leyen, President of the European Commission, made yesterday: Let’s make sure that we remove the barriers that we have control over,” Lagarde said, without revealing details.
Lagarde expressed her hope that this would happen in the coming weeks, and described it as “one way to respond to the change in trade policy in the United States.”
“Be strong at home and make sure you are transacting, buying and selling at home, saving at home, investing at home. This does not mean that we want to move to a protectionist approach, because what we have learned from lower barriers,” Lagarde added: “We believe that trade is very useful in reality”.
— CNBC’s Katrina Bishop contributed to this report.
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