ECB Executive Board Member Highlights Risks of Trade Fragmentation

European Central Bank (ECB) Executive Board member Piero Cipollone expressed concerns on Tuesday about the significant effects that the tariffs imposed by the United States under President Donald Trump could have on the real economy. Describing the potential impacts as "likely to be material," Cipollone's remarks came during a conference focused on global trade challenges.

Threats to International Partnerships

At the event, titled "Policy challenges in a fragmenting world: Global trade, exchange rates, and capital flow," Cipollone pointed out the "rising risk" of fragmentation within the Western bloc. He emphasized how these tariffs could endanger long-standing international partnerships, signaling a shift in global trade dynamics.

Long-Term Consequences for Growth and Stability

The ECB official also warned about the deeper implications of such fragmentation. According to Cipollone, the medium- and long-term effects on "growth, stability, and prosperity" could be "potentially profound," highlighting the need for careful consideration and policy response to mitigate these risks.