Germany’s central bank on Thursday warned of greater uncertainty about the global economic outlook due to growing tensions between the U.S. and other major economies.
Speaking to reporters in Berlin, German central bank president Jens Weidmann expressed concern over the escalating trade tensions.
“Global economic growth remains buoyant, primarily driven by the two biggest economies in the world – the U.S. and China. However, political risks have increased, especially the risk of an escalation of international trade conflicts,” he said.
Weidmann warned that a major trade war “could be severely detrimental to the global economy.”
His remarks came after U.S. President Donald Trump threatened late Tuesday to put a 25 percent tax on every car that comes from the European Union, and amid raised U.S. tariffs on Turkish goods, in what the Turkish leadership has called an “economic attack” and EU leaders have also criticized.
Last month Trump agreed to launch trade talks with the EU, which raised hopes in European capitals that they could avoid a transatlantic trade war.
Trade tensions between the U.S. and China further escalated this week after the U.S. decided to implement 25 percent tariffs on another $16 billion worth of Chinese goods.
In July, the U.S. began implementing 25 percent tariffs on $34 billion worth of Chinese goods.
Trump said last month that he is ready to increase tariffs on Chinese goods to $500 billion, almost the total value of goods the U.S. imported from China last year.
By Ayhan Simsek in Berlin