Dublin (Reuters) – The customs duties promised by American president Donald Trump remain veiled in uncertainty and their impact will depend on their duration, their ambition, and any negotiations, said Christine Lagarde, president of the European Central Bank (ECB) on Wednesday.
“This will be negative for the whole world and the duration of this impact will vary depending on the scope, targeted products, duration and negotiations, or not,” said the manager during an interview with Irish radio Newstalk.
“Let us not forget that very often, these pricing escalations, because they prove harmful even for those who inflict them, push for negotiation and then to the abolition of some of these barriers,” added the president of the ECB.
“I do not think I have never mentioned the word ‘uncertainty’ as many times as in recent weeks, because we simply do not know, to this day which is supposed to be the day of the announcement, which the agreement (with the United States) will understand for the rest of the world,” said Christine Lagarde.
“Predictability is very rare at the moment.”
A serious disruption of world trade could lead to an increase in inflation of several percentage points in the early years, while a “light decoupling” would have an impact less than 1% but which could take years to dissipate, warned Isabel Schnabel, member of the BCE board of directors on Wednesday.
“The United States is so important that what is happening in the United States can have an influence on our decisions.”
The White House said that Donald Trump would be expressed on Wednesday at 4:00 p.m. (8:00 p.m. GMT) on Wednesday during what he called the “Liberation Day” (Liberation Day) to mark the launch of a commercial policy presented as favorable to American consumers and products.
Christine Lagarde also praised the work of the ECB on inflation.
“We are now very close to the (inflation) objective, so the disinflation process is well committed (…) but we are quite satisfied with the work we have accomplished,” the manager summed up.
(Written by Padraic Halpin, Corentin Chappron, edited by Augustin Turpin)
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