Lagarde: Tariff Moves Threaten Trade Balance Between Europe and America

SadaNews - European Central Bank President Christine Lagarde stated that the latest tariff moves by U.S. President Donald Trump could disrupt the balance that was previously negotiated between the European Union and the United States, and could represent a new headwind for the economy.

Lagarde added on Sunday in an interview with CBS's "Face the Nation" program that it is "of utmost importance" to obtain clarity regarding the future of trade relations, especially after the U.S. Supreme Court ruled against Trump’s use of emergency powers to impose what he called "reciprocal" tariffs globally.

She said, "You want to know the rules of the road before you get in the car. The same applies to trade."

U.S. Escalation and European Response

After Friday’s ruling sparked Trump's anger, the U.S. President imposed a global 10% tariff on foreign goods, only to raise it to 15% the next day. European Union lawmakers are scheduled to hold an emergency meeting on Monday to reassess the trade agreement between the EU and the United States.

The chair of the European Parliament’s trade committee announced on Sunday that he would propose freezing the ratification process for the trade agreement between the EU and the United States in light of the "chaos" on the other side of the Atlantic.

Lagarde said: "If that entire balance that traders have become accustomed to is shaken, as they continued their activities after the April decisions and the trade arrangement between the U.S. and Europe in July, then reshuffling the cards will inevitably lead to business disruptions," noting that the previously reached agreement included exceptions and exemptions.

She added that American consumers were not exempt from the "pain" of tariffs.

Lagarde Sticks to Completing Her Term Despite Speculations

In response to a question about her future as President of the European Central Bank, amid speculations regarding her stepping down before the end of her term in October 2027, Lagarde stated that she is "fully committed to this mission."

She clarified: "My baseline scenario is to continue until the end of my term," echoing comments she made last week on the matter.

The Financial Times reported on Wednesday that Lagarde plans to leave the European Central Bank before the end of her eight-year term, which would allow French President Emmanuel Macron to play a role in selecting her successor ahead of the French elections, which may pave the way for the rise of the far-right.

Lagarde indicated to CBS that "voters in any country in the world make their choices, and those choices must be respected."