European Central Bank President Christine Lagarde said in a recent exclusive interview with Xinhua News Agency that the uncertainty brought about by a series of tariff hikes and threats by the US government is suppressing global investment, leading all institutions to lower their growth expectations for the global economy, the US economy, and the European economy.
“The situation we are facing is indeed a lose-lose one,” Lagarde told reporters in Beijing on the 12th. She emphasized that the earlier the uncertainty is eliminated and the earlier all parties reach an agreement on tariff and non-tariff barriers, the greater the benefits for everyone.
She pointed out that both investors and business operators are facing huge difficulties in dealing with uncertainties. The same is true for the central bank. Because the central bank needs to predict economic trends and price levels, “with this huge uncertainty, our lives will become very difficult.”
Lagarde said that many countries, including EU member states, China, and the United States, are connected through the global supply chain. When you disassemble a product and analyze its origin, the source of components, logistics, and transportation, etc., you will be surprised to find that the connections among countries are so close, and the factors that affect one country will also affect other countries.
She believes that if uncertainties cannot be eliminated in a timely manner, enterprises may reconsider their supply chains, which will lead to more severe vulnerabilities, damage economic growth, and increase inflationary pressure as a result. “I think this is not in the interests of any country, not only the United States, China, and European countries, but also for many countries.”
Lagarde said she hopes the situation will develop in a direction that eliminates uncertainties as much as possible. If a new balance that benefits all countries can be achieved, “that would be positive.”
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