Under the shadow of the Trump tariffs a day after his inauguration in the US, European Commission President warned on Tuesday of the risk of a ‘global race to the bottom’ using economic tools such as sanctions, export controls and tariffs.
Speaking at the World Economic Forum‘s annual meeting a day after the inauguration of U.S. President Donald Trump, Von der Leyen spoke of a new era of harsh geostrategic competition.
“As this competition intensifies, we will likely continue to see frequent use of economic tools, such as sanctions, export controls, and tariffs, that are intended to safeguard economic and national security,” she said.
But she said innovation must not be stifled.
“In this spirit, we will need to work together to avoid a global race to the bottom,” she added.
“Because it is in no one’s interest to break the bonds in the global economy. Rather we need to modernize the rules to sustain our ability to produce mutual gain for our citizens.”
Trump said on Monday that he wanted to reverse the U.S. trade deficit with the European Union, either with tariffs or more energy exports.
Trump Tariff Shadow
Donald Trump on Monday said he was thinking of imposing 25% tariffs on imports from Canada and Mexico because they were allowing many people to cross the border as well as fentanyl.
He said the action could come on Feb. 1. He said he had spoken with Canadian Prime Minister Justin Trudeau.
Announcing tax reliefs in his inauguration speech, Trump said: “We will not add the tax burden on our citizens. Instead, we will add tariffs on foreign countries, which will bring in immense amounts of money and make America rich again.”
(With inputs from Reuters)
