Christine Lagarde said she expects only a slight inflationary impact from US tariffs, with Germany affected more than France. (Reuters pic)
Lagarde said she only expected a slight inflationary effect from US tariffs, with a stronger impact on Germany than on France, but she added European countries would be much stronger if they scrapped non-tariff trade barriers within the bloc.
“As we have inflation under control at 1.9%, the impact will be minimal. What is much more serious … is the degree of uncertainty created by these constant reversals”, she said, referring to the threat of higher tariffs.
US President Donald Trump vowed on Saturday to implement a wave of increasing tariffs from Feb 1 on EU members Denmark, Sweden, France, Germany, the Netherlands and Finland, along with Britain and Norway, until the US is allowed to buy Greenland, a step major EU states decried as blackmail.
Trump “often adopts a transactional approach … he sets the bar very high at levels that are sometimes completely unrealistic”, Lagarde said.
In response, Europe should indicate what instruments are available, demonstrate collective determination, and be united and resolute, she added.