Market Data
The threat of new duties to the European Union by Trump “does not surprise me” and “here, in Europe, we must prepare and know how to answer.” The President of the ECB, Christine Lagarde, spoke sharply to CNBC during her interview at Davos, where she detailed her concern regarding Trump’s push for replacing American supply with EU products during trade barriers. She emphasized the EU’s potential to exploit the internal market further, stating that China has the “potential to absorb the impact of these new unilateral measures. Her comments highlight the need for comprehensive strategies to mitigate risks and ensure stability in the market.
Lagarde’s expertise on domestic markets suggests that the EU has the capacity to absorb such changes, but she also acknowledged that Trump’s objectives are not straightforward. She defended the ECB’s positions, acknowledging the difficulty in predicting the impact of his policies on presumption of a single market. However, she was clear about the importance of dialogue and seeking clarity on Trump’s intentions, emphasizing the need for a cooperative approach.
Valdis Dombrovskis, the EU Commissioner for the Economy, echoed the ECB’s concerns during an interview with CNBC. He noted that the EU is well-prepared to defend its interests if Trump’s measures pose a threat. Dombrovskis agreed with Lagarde’s views, stating that the EU is ready to take polar actions if necessary, even if it requires gradual adjustments based on data. He also expressed reservations about the ECB’s readiness, especially if the EU is ready to respond to the threat, but he noted that Trump’s approach is significant.
Cornelis Talhoef, a senior analyst at the Rac Uno Center, shared insights into the ongoing trade tensions between the US and Europe, warning against a potential escalation in tensions. He advanced a scenario of prolonged trade tensions that could lead to further economic disruption and uncertainty. However, Dombrovskis dismissed these fears, noting that the sanctions implementing to protect Russia are working and a stronger stance is crucial.
Dombrovskis also highlighted the import of Ukraine into the EU, noting that sanctions against Russia are working but that a more courageous action is needed to address the attacker. He assured the EU that the impact of Trump’s trade policies will be contained, arguing that these measures are part of a strategy designed to protect the EU and its citizens.
In summary, during his interview, both Christine Lagarde and Valdis Dombrovskis underscored the EU’s preparedness to respond to potential threats, despite challenges like the US’ trade policies. Their comments reflect a poised response to the threat of new duties, with the hope of securing a stable EU environment for years to come.
