ECB's Lagarde Tariffs will be negative for global growth in the long-term

European Central Bank (ECB) President Christine Lagarde said on Thursday that a trade war at large would be a "net negative for all" and not just for the targets of US tariffs, per Reuters.

Key quotes

Trump has indicated a range of tariffs around 10-20% for the rest of the world.

The fact that you put out a range means that you are open to discussion.

Europe is erring towards a "cheque book strategy”.

We could offer to buy certain things from the US and signal that we are prepared to discuss to see how we can reach a compromise.

This is a better scenario than a pure retaliation strategy where there is no real winner.

An all-out trade war would cause a negative drag on global GDP

The actual net impact on inflation is still uncertain at this stage. It is "extremely difficult" to assess the outlook as you may have a combination of a decline in GDP and potential depreciation or appreciation of the dollar.