15/03/2025 06:50 AST

A full-scale global trade war would hurt the United States in particular and could re-energize Europe's push towards unity, European Central Bank President Christine Lagarde said on Friday.

The US has imposed a raft of tariffs on friends and foes alike and threatened even more measures, prompting retaliation from most and raising concern that global growth could take a major hit.

"If we were to go to a real trade war, where trade would be dampened significantly, that would have severe consequences," Lagarde told BBC's HARDTalk program. "It would have severe consequences for growth around the world and for prices around the world, but particularly in the United States."

However, these tensions could also have the positive side effect of giving European unity another push, Lagarde argued.

"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," she said.

The European Commission and Germany, the bloc's biggest economy, have already announced increased spending on defense and infrastructure, ending years of reluctance to spend, Lagarde argued.

This "collective waking up" also appears to include the UK, which left the European Union, as it's taking part in Europe's security effort, Lagarde argued.

Many of the EU's large scale efforts to deepen unity have been stalled for the better part of the last decade and former ECB chief Mario Draghi delivered a scathing report on the European project last year.

Leaders, however, have taken few if any steps to implement Draghi's reform proposals, even as the bloc is barely growing now and Germany suffered two straight years to economic contraction.


Asharq Al Awsat

Ticker Price Volume
Index Closing Change
NIKKEI 225 36,581.76 -251.51 (-0.68%)
DAX 18,699.40 181.01 (0.97%)
S&P 500 5,626.02 30.26 (0.54%)
Wall Street Battered Again by Trump Chaos as New Winners Emerge

15/03/2025

This is the market Ben Inker has been waiting for. In the grip of Wall Street's rebellion against President Donald Trump's tariff agenda - with stocks down around 2% this week even after Friday's big

Bloomberg

Gold surpasses $3,000 per ounce for first time ever

15/03/2025

Gold prices surpassed USD 3,000 per ounce on Friday for the first time in history, driven by growing global demand for safe-haven assets amid ongoing uncertainty over US tariffs.

In early tr

QNA

India becomes top FDI source in Dubai with $3 billion investment

13/03/2025

India's foreign direct investment into Dubai surged to over $3 billion in 2024, making the South Asian nation its top investor, the latest data shows.

Dubai's Department of Economy and Touri

Arab News

Citi cuts recommendation for US stocks as recession fears hit, lifts view on China

12/03/2025

Citi analysts cut their recommendation for U.S. stocks to "neutral" from "overweight" on Monday after recession fears pummelled the market, arguing that the U.S. economy may no longer outpace the res

Reuters

Trump meets Corporate America as economic worries nip stocks

11/03/2025

US President Donald Trump is meeting the CEOs of America's biggest companies, many whose market value has dipped in recent days as recession and inflation fears soured consumer and investor sentiment

Khaleej Times