Lagarde warns EU about potential U.S. tariff impacts

European Central Bank President Christine Lagarde addressed concerns over the escalating trade tensions with the U.S. during a summit of EU leaders in Brussels. She warned that the ongoing trade war could significantly impact the eurozone’s economy. Lagarde estimated that unilateral tariffs imposed by the U.S. could reduce the eurozone's growth rate by 0.3 percentage points in the first year. If the EU retaliates, this impact could increase to 0.5 percentage points. Additionally, she noted that inflation in the eurozone might rise by 0.5 percentage points as a result. Despite these concerns, Lagarde suggested that the EU could mitigate potential losses. She pointed out that increasing trade ties with other global partners, excluding the U.S., might help offset the negative effects of any tariffs. Lagarde also commented on the rumors surrounding a proposed "Mar-a-Lago accord." This proposal supposedly aims to devalue the dollar to support American manufacturing with help from allies. She dismissed this idea as speculative and lacking in substantial backing from the Trump administration.