Global Economy Under Threat... Lagarde Warns against Trade War

European Central Bank (ECB) President Christine Lagarde warned that the escalating dispute over tariffs imposed by US President Donald Trump could have a damaging impact on the global economy.

"If we go into a real trade war, trade will be significantly affected, and that will have serious consequences... for growth and prices around the world, particularly in the United States," Lagarde told the BBC.

"The decisions and counter-decisions of US President Donald Trump are cause for concern and require extreme caution," she added, adding that they "also create a level of uncertainty we haven't seen for a long time," according to DPA.

Since taking office in January, Trump has implemented a program of selective tariffs, raising tensions that threaten to spark a trade war. These policies threaten growth and impact economic activity by increasing uncertainty for businesses, consumers, and investors, according to Bloomberg.

Trump threatened on Thursday to impose tariffs on wines and spirits from France and other European Union countries if Brussels proceeds with its tariffs on American whiskey imports.

Lagarde said that "any trade war will harm the global economy," noting that Brussels has "no choice" but to respond to the US measures. 

She added that given the timeframe between the announcement of these measures and their implementation, there is still time for negotiations.