Speaking on CBS’s “Face the Nation,” Lagarde said that at some point exporters and importers, who currently bear the brunt of tariffs, will have to pass the cost on to consumers.
“Two-thirds of the costs of tariffs are currently borne by two parties, the exporter and the importer, through the reduction of their profits. The question is how long they will agree to the reduced margins. When they decide that they can no longer bear the pressure, the cost will fall on the consumers. It is only a matter of time,” Lagarde pointed out.
Lagarde also stated that tariffs are one of the two key factors that have led to the “transformation” of the world economy, while the other is accelerated technological progress, especially in the field of artificial intelligence.
“This transformation is the result of two things. The first is tariffs, which have changed the global trade map, created new alliances and reformed the way we trade with each other. The second is artificial intelligence, which affects everything from data management to dating and everything in between,” the ECB president said.
Commenting on the current trade tensions between the United States of America and China, Lagarde assessed that part of it represents the negotiating positioning of both sides.
“I think that part of what is happening right now should be taken with a grain of salt, because it is a typical negotiating tactic, you show your muscles and say that you are ready for anything. I am exaggerating, of course, but at some point they will have to sit down at the table, because it is in the interest of both economies, regardless of the hostile rhetoric,” concluded Lagarde.
Lagarde, who has been the head of the European Central Bank since 2019, was previously the Minister of Foreign Trade in the French Government and the head of the International Monetary Fund.
(Vijesti.ba)
