"Lagarde": Europe must strive to strengthen its trade relations with partners other than America

SadaNews - The President of the European Central Bank, Christine Lagarde, emphasized the need for Europe to reconsider its trade partnership map.

Lagarde stated during a speech at a session at the World Economic Forum in Geneva yesterday, that the United States will remain an important trading partner, but Europe must also seek to deepen its trade relations with other partners, benefiting from the strength of its export-oriented economy.

U.S. trade pressures

Lagarde's remarks come amid increasing pressures faced by Europe after the administration of President Donald Trump imposed new tariffs on European imports.

According to Lagarde, the recent trade agreement between the European Union and the U.S. sets an effective average tariff on U.S. imports of European goods between 12% and 16%, indicating that the base tariff agreed upon between the European Commission and the U.S. administration is 15% and encompasses most goods.

The President of the European Central Bank noted that while some trade agreements have helped mitigate the impact of these tariffs, they have not eradicated global uncertainty. She stated: "Recent trade agreements have alleviated some of the ambiguity, but they certainly have not eliminated it, given the unpredictable political environment."

Implications for the ECB

Lagarde confirmed that the repercussions of the trade agreement with America will not be limited to trade flows only but will also affect the forthcoming estimates of the European Central Bank.

The newspaper noted that bank staff will take the effects of the deal on the Eurozone economy into account in the forecasts scheduled to be issued next September, which will play a crucial role in guiding European monetary policy decisions in the coming months.

According to the Wall Street Journal, Lagarde’s statements come as a continuation of previous positions in which she called for strengthening the EU institutions and their economic resilience, enabling the elevation of the Euro's status on the international stage, especially in light of the increasing U.S. protectionist policies.

Source: Reuters + Wall Street Journal