Trade war will cause severe consequences, ECB's Lagarde warns

ISTANBUL

Citing US President Donald Trump's tariff policies, European Central Bank (ECB) President Christine Lagarde warned that a full-scale trade war could have severe consequences for the global economy.

“For growth around the world and for prices around the world, but particularly in the US," Lagarde said during an interview with British broadcaster BBC.

The initiator, the retaliator, the re-retaliator, and so on and so forth—all of that is going to hurt growth at large, she stressed, underlining that everyone will suffer, which she said is a constant in history of trade.

Trump's 25% tariffs on all steel and aluminum imports took effect on Wednesday.

On March 4, Trump also imposed 20% tariffs on China.

He also threatened to impose 25% tariffs on Canada and Mexico, but later postponed those tariffs after negotiations with the two countries' leaders.

On Thursday, Trump threatened to impose 200% tariffs on alcohol drink imports from the EU unless the union withdraws a 50% tariff on American whiskey.

The president's tariff threats continue to stoke fears of a further global trade war as countries vow to take retaliatory measures.