{"id":15842,"date":"2025-02-04T11:24:27","date_gmt":"2025-02-04T11:24:27","guid":{"rendered":"https:\/\/financialrush.com\/?p=15842"},"modified":"2025-02-04T11:24:27","modified_gmt":"2025-02-04T11:24:27","slug":"eu-cannot-lie-down-against-threat-of-trump-trade-war-finnish-central-banker-warns","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=15842","title":{"rendered":"EU \u2018cannot lie down\u2019 against threat of Trump trade war, Finnish central banker warns"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Unlock the White House Watch newsletter for free<\/p>\n<p class=\"article__content-sign-up-topic-description\">Your guide to what the 2024 US election means for Washington and the world<\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=dc222523-db25-4904-a083-4b60aa3f6d9a&amp;newsletter-id=65b8fec772badb00166eafc6\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The EU must stand its ground in a potential trade war with the US and should retaliate if President Donald Trump imposes punitive tariffs on European goods, said Bank of Finland governor Olli Rehn.<\/p>\n<p>\u201cThe last thing we need is a new trade war between allies but we need to take proportionate policy measures [in case the EU is going to be targeted by the US],\u201d the former European economic commissioner said. <\/p>\n<p>He told the Financial Times that \u201cwe cannot lie down\u201d in the face of US threats \u2014 \u201ceven if it is friendly fire\u201d.<\/p>\n<p>Trump has warned that imports from Europe may be next in line after the US moved to impose 25 per cent tariffs on Canadian and Mexican imports and an additional 10 per cent levy against Chinese goods. The tariffs on Mexican and Canadian imports were paused for a month on Monday while China <a href=\"https:\/\/www.ft.com\/content\/5653e2d6-2316-4316-9a7c-72cf4f7d86e5\" data-trackable=\"link\">imposed tariffs<\/a> on US energy export and farm equipment.<\/p>\n<p>One of the 26 members of the European Central Bank\u2019s governing council, Rehn struck a more combative tone on the matter than president Christine Lagarde. Late last year she told the FT that the EU <a href=\"https:\/\/www.ft.com\/content\/24d5d526-b970-4e53-a262-9a678319ce23\" data-trackable=\"link\">should aim for a deal<\/a> with Trump as a trade war was \u201cin nobody\u2019s interest\u201d. <\/p>\n<p><a href=\"https:\/\/www.ft.com\/stream\/a3dbe984-b581-4e3e-beab-73aeec605fdd\" data-trackable=\"link\">Rehn<\/a> stressed that the \u201cfirst goal\u201d in European trade policy should be to find a \u201cnegotiated solution\u201d, as an escalating trade conflict should be completely avoided at a time when a \u201cbrutal war\u201d was being fought on Europe\u2019s fringe in Ukraine.<\/p>\n<p>But if negotiations failed, Europe needed to fight back. <\/p>\n<p>\u201cIf you ask economists, the majority would say that it would be better for everybody not to retaliate. But this is not only [about] economics, this is mostly politics,\u201d said Rehn. <\/p>\n<p>\u201cIt\u2019s better to prepare policy measures, consult member states and in case Europe will be concretely targeted by tariffs, then make it more specific,\u201d he added, stressing that the bloc did not need to disclose potential retaliatory moves in advance.<\/p>\n<p>The EU can enter any conflict with \u201cself-confidence\u201d, he said, pointing to the fact that its single market, which has a population of about 450mn, was \u201cinteresting to any trading partner\u201d. The EU has also <a href=\"https:\/\/www.ft.com\/content\/e4e514f4-dea6-43a5-aeb3-83956b563169\" data-trackable=\"link\">expanded its trade network<\/a>, most recently with four South American countries that belong to the Mercosur group.<\/p>\n<p>Potential US attempts to strike unilateral deals with individual EU countries were likely to fail, Rehn said. <\/p>\n<p>\u201cThe European Commission has strong prerogatives in trade policy, which is a safeguard for European unity,\u201d the veteran policymaker added.<\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image o-teaser--opinion js-teaser\" data-id=\"ba1c81a2-0b5e-4a40-a9f6-35228d958b19\">\n<div class=\"o-teaser__image-container js-teaser-image-container\"><a href=\"https:\/\/www.ft.com\/content\/ba1c81a2-0b5e-4a40-a9f6-35228d958b19\" data-trackable=\"image-link\" tabindex=\"-1\" aria-hidden=\"true\"><\/p>\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2491\/1401\"><\/div>\n<p><\/a><\/div>\n<\/div>\n<\/aside>\n<p>Europe faced low growth and a large exposure to American trade \u2014 the US is the largest market for the EU goods and the second biggest source of imports to the EU after China \u2014 but it still had little reason to be cowed by the prospect of a trade war with its most important ally. <\/p>\n<p>\u201cTariffs will hit most American consumers and will have an inflationary effect on the US economy,\u201d Rehn said, adding that the dollar\u2019s rise after the <a href=\"https:\/\/www.ft.com\/trump-tariffs\" data-trackable=\"link\">tariff<\/a> announcements had made it more difficult to lower the US trade deficit as the country\u2019s imports become cheaper while its exports rise in value. <\/p>\n<p>While a trade war would be expected to dent growth in Europe, its effects on consumer prices were unclear, the Finnish central banker said.<\/p>\n<p>He also raised doubts over the argument that tariffs were a negotiation tool to advance Trump\u2019s other policy goals. <\/p>\n<p>\u201cThere seems to be a different kind of rationality [in Washington] than to what we are used to in international relations,\u201d he said. \u201cAs President Trump has himself stated, he\u2019s a \u2018tariff man\u2019 and it seems to be a very ideological issue for him and his administration.\u201d<\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/dc222523-db25-4904-a083-4b60aa3f6d9a\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the White House Watch newsletter for free Your guide to what the 2024 US election means for&hellip;\n","protected":false},"author":6,"featured_media":15843,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-15842","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/15842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15842"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/15842\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/15843"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}