Lagard

European Central Bank President Christine Lagarde announced on Wednesday evening that “US customs duties may have a contraction on Europe if the continent does not take counter measures, but it will push China to redirect its exports to the region.”

US President Donald Trump raised customs duties on Chinese imports this month, actually reaching 145 percent when taking the fees imposed earlier this year.

Lagarde said in an interview with the Washington Post that while these fees may raise inflation in the United States, it may have an opposite effect on Europe, although the result of inflation is still unconfirmed due to the diversity of influencing factors.

“China will suffer from a surplus of production capacity, and you will want to redirect its exports to a place, perhaps to Europe, and this will have a price impact,” she added.