ECB's Villeroy: Trump's economic agenda risks global economy, return of inflation

ECB's Villeroy: Trump's economic agenda risks global economy, return of inflation

“The programme risks bringing back inflation to the United States,” Villeroy told France Inter radio. “It risks lowering growth a little bit, all over the world. It remains to be seen if the reduction will be felt more in the United States, China or in Europe.”

Trump has floated the idea of a tariff of 10% or more on all goods imported into the United States, which he says would eliminate its trade deficit.

© Reuters. Bank of France Governor Francois Villeroy de Galhau looks on during the 54th annual meeting of the World Economic Forum in Davos, Switzerland, January 16, 2024. REUTERS/Denis Balibouse/File Photo

But Villeroy predicted U.S. consumers would bear the brunt of many of the tariffs.

“Protectionism almost always means reduced purchasing power for consumers,” Villeroy said.

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