ECB ‘ready’ to intervene if tariff war threatens financial stability, says Lagarde
The president of the European Central Bank, Christine Lagarde, smiles as she arrives to attend the Informal Meeting of EU Ministers for Economic and Financial Affairs and Central Bank Governors (ECOFIN) in Warsaw, Poland, on April 11, 2025. (Photo by Wojtek RADWANSKI / AFP)
WARSAW, Poland — The European Central Bank is ready to act should US President Donald Trump’s tariff blitz threaten financial stability, ECB chief Christine Lagarde said Friday.
The ECB “is always ready to use the instruments that it has available”, Lagarde said in Warsaw.
She said this after talks with eurozone finance ministers about how Europe can avert a trade war — or protect its economy if negotiations to avoid US levies fail.
READ: US would lose out in trade war vs the world – European Central Bank
“What we have observed recently, of course, is a degree of volatility,” she told reporters.
“But in Europe, and in the euro area in particular, we have observed that market infrastructures and functioning of markets, including the bond markets, is functioning in an orderly fashion,” Lagarde said.
Her comments come less than a week before the ECB’s next meeting to decide on monetary policy.
The meeting approaches as European stock markets are struggling for direction in early afternoon deals.
Meanwhile, the US dollar dropped to the lowest level against the euro in more than three years.
US-China trade war rattles markets
Although Trump announced a 90-day pause of his stinging universal tariffs, a trade war between China and the United States has continued to escalate with tit-for-tat levies.
With no end in sight, their fight has caused jitters in markets, especially Asia.
Lagarde was joined by top EU officials including economy commissioner Valdis Dombrovskis.
Dombrovskis warned that US tariffs would hit the European Union’s economic growth.
According to EU estimates, the bloc could see a hit to economic growth of 0.2 percentage points, spread over the period from now until 2027, if the situation does not improve or deteriorate.
“If tariffs are perceived to be permanent or if there are further countermeasures the economic consequences would be more negative”, Dombrovskis said, this could rise to “0.5-0.6 percent for the EU and 1.2 percent for world GDP” over three years.
