ECB Lagarde Warns of Consequences of Trade War with US

European Central Bank President Christine Lagarde stressed on Friday that a full-blown global trade war would hurt the United States in particular and could revitalize Europe’s efforts toward closer unity.

Lagarde said in remarks broadcast by the BBC, “If we slide into a real trade war and trade is significantly impacted, it will have serious consequences for growth and prices around the world, but especially in the United States.”

She indicated that this tension could also have a positive side effect, giving European unity a renewed boost, explaining that the European Commission and Germany, the EU’s largest economy, have already announced increased spending on defense and infrastructure.

She added, “This collective awakening seems to also include Britain, which has left the European Union, because it is participating in efforts to strengthen European security.” The United States has imposed a series of tariffs on several countries and threatened to take further action, prompting most of these countries to take reciprocal steps, raising concerns that global economic growth could suffer a major blow.