Customs war threatens: Lagarde warns of serious consequences for Europe and the USA!

Customs war threatens: Lagarde warns of serious consequences for Europe and the USA!

The tensions between the European Union and the USA are increasing in view of President Donald Trump's threats. ECB President Christine Lagarde warned of the serious economic consequences of a possible trade war. In particular, there could be a steaming of growth and an increase in inflation, as reported krone.at . Trump had recently imposed tariffs on aluminum and steel imports from the EU, and even threatened to hit wines and other alcoholic beverages with a huge 200 percent customs, which would particularly hit France. In response, the EU plans to introduce a 50 percent customs from the USA from mid-April.

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Lagarde was concerned about the uncertainty that creates this customs policy. Your assessment is clear: the majority of the economic effects would concentrate on the first year after the customs increases, whereby the long -term consequences could decrease. However, it also sees an opportunity for Europe, which may be strengthened by increased defense spending and greater cohesion. As Zeit.de , a real trade war could have serious consequences for growth and prices, but especially in the USA itself.

The countermeasures planned in the EU could affect products worth 26 billion euros, which would significantly burden the trade relationships between the two sides. Lagarde hopes that serious negotiations will take place between the EU and the United States to prevent the current conflict escalation. The ECB boss emphasized that a process of isolation would only lead to further losses and that closer cooperation with the rest of the world would be necessary to stabilize the economic situation.