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Europe needs to be “prepared” and anticipate trade tariffs from newly inaugurated US President Donald Trump, European Central Bank President Christine Lagarde told CNBC on Wednesday.
He said Trump’s failure to impose blanket tariffs on the first day of his presidency was “a very smart move … because blanket tariffs don’t necessarily give you the results you expect.”
As such, he said he expects Trump’s tariffs to be “more selective, more targeted.”
“What we need to do here is be prepared in Europe and anticipate what’s going to happen so we can respond,” he told CNBC’s Karen Tso at the World Economic Forum in Davos.
Trump has threatened to impose tariffs on goods imported from the EU to the US and has repeated those claims since taking office on Monday, telling reporters the EU was “very, very bad for us. So there will be. tariffs.”
European Union Economic Commissioner Valdis Dombrovskis told CNBC on Wednesday that if the bloc’s economic interests had to be defended, the EU respond in a “proportionate manner”.
A ‘way to respond’ to US trade policy
Lagarde also called for the removal of barriers to trade in Europe, noting that despite the plans to create a single market, there were still some obstacles that prevented goods and services from traveling safely.
“I think it’s one of the points that the president of the European Commission, Ursula von der Leyen, made yesterday – let’s make sure that we remove the obstacles that we have control over,” said Lagarde, without giving details.
Lagarde said she expects this to happen in the coming weeks, describing it as “a way of responding to the change in US trade policy”.
“Be strong at home and make sure you transact, sell and buy at home, save at home and invest at home. Not to say that we want to go into a protectionist approach, as lower barriers have taught us. We think trade is very helpful,” he added. says Lagarde.
— CNBC’s Katrina Bishop contributed to this report.
