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European Central Bank (ECB) President, Christine Lagarde, on Friday expressed her concerns about the potential impacts of a full-scale global trade war.

She highlighted that such a conflict would particularly harm the United States and could stimulate Europe’s drive towards unity.

The U.S. has recently been imposing a series of tariffs on both allies and adversaries, leading to retaliatory actions from many countries. This has raised concerns about a significant blow to global growth.

Lagarde, in her conversation with BBC, stressed the severe consequences of a real trade war. She stated, "If we were to go to a real trade war, where trade would be dampened significantly, that would have severe consequences for growth around the world and for prices around the world, but particularly in the United States."

Lagarde also pointed out a potential positive outcome from these tensions. She suggested that these trade conflicts could serve as a catalyst for reinforcing European unity.

She explained, "You know what it’s doing at the moment? Stirring European energy. It’s a big wake-up call for Europe. Maybe this is a European moment, yet again."

Yesterday, President Trump issued a threat to impose a 200% tariff on European alcohol, in response to the European Union’s retaliatory measures against his steel and aluminum tariffs.

In a statement made on Truth Social, Trump warned that his administration would enforce this massive tariff on EU alcoholic beverages unless the European government retracts its 50% tariff on U.S. spirits, which was imposed on Wednesday.

Trump wrote, “If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.”

The back-and-forth tariff impositions between the U.S. and the EU have escalated rapidly. Trump’s 25% tariffs on aluminum and steel, which came into effect at midnight on Wednesday, were quickly met with retaliation from the EU.

The European government described the U.S. tariffs as "unjustified" and responded with their own set of tariffs.

Earlier this week, the EU imposed tariffs on $28 billion worth of American goods, including boats, bourbon, and motorbikes. These countermeasures are set to go into effect in April and were described as "swift and proportionate" by the EU in an official statement.

– Source: investing.com