ECB Official Warns of Inflation and Interest Rate Hikes Due to US Tariffs

European Central Bank (ECB) official Klaas Knot has issued a warning about the potential economic repercussions of the new tariffs imposed by US President Donald Trump. According to Knot, these tariffs are likely to fuel inflation and lead to higher interest rates in the United States, which could, in turn, weaken the euro.

Trade Wars and Their Global Impact

In his appearance on Dutch television, Knot highlighted the detrimental effects of trade wars, emphasizing that they harm all involved parties and often provoke retaliatory measures. "Europe will not want to be pushed around. We are also a powerful trade bloc with 400 million consumers," stated Knot, who also holds the position of president at the Dutch central bank.

Implications for US Consumers and the European Economy

Knot pointed out that the imposition of tariffs would inevitably lead to higher consumer prices in the US. This situation would compel the Federal Reserve to increase interest rates, with potential economic spillovers expected to affect Europe as well.