Europe must be prepared for a potential increase in import tariffs on goods from the United States, as promised by President Donald Trump, stated the head of the European Central Bank (ECB), Christine Lagarde.
The fact that Trump has not yet signed an order to impose additional tariffs on the entire volume of imports was a "very smart approach, as blanket tariffs do not necessarily lead to the expected outcomes," Lagarde told CNBC in Davos.
In her view, the new American tariffs will be more "selective and focused."
"We in Europe need to prepare and anticipate what will happen in order to respond accordingly," Lagarde added.
At the same time, the ECB chief noted that the regulator is "not overly concerned" about external risks to inflation.
In response to a journalist's question about potential consequences of a new wave of inflation in the U.S., Lagarde said that "the acceleration of inflation in the United States will be a problem for the United States, and the primary effects will be felt there first."
The ECB cut rates by a total of 100 basis points in 2024, with the current key deposit rate at 3%. Economists expect the regulator to implement four rate cuts of 25 basis points each in 2025.