European Central Bank President Christine Lagarde called for international cooperation to resolve escalating trade tensions, warning that coercive trade policies and protectionism risk long-term damage to the global economy. Speaking in Beijing during a visit to strengthen EU-China economic ties, Lagarde emphasized the need for mutual concessions and adherence to global trade rules.
Her remarks come amid heightened tensions triggered by U.S. President Donald Trump's sweeping tariffs, which have disrupted trade flows and shaken markets since April. While recent China-U.S. talks have aimed to ease the standoff, concerns remain over retaliatory measures and long-term impacts on global supply chains.
Lagarde criticized the growing use of industrial subsidies—particularly by China but also in emerging markets—as distorting global trade. She also pointed to the rising share of U.S. demand, driven by excessive public spending, as a contributor to global imbalances.
“A cooperative approach is essential,” Lagarde told the People’s Bank of China, warning that continued escalation threatens to erode global prosperity. She urged nations to adjust structural and fiscal policies, avoid unilateral measures, and pursue bilateral or regional agreements grounded in mutual benefit.
With an EU-China summit ahead, both sides aim to ease trade frictions, including discussions on Chinese electric vehicle pricing and resource exports. Lagarde stressed that defending the multilateral trade framework is critical to ensuring long-term economic stability.