FRANKFURT (Reuters) - Trade wars damage the global economy, only produce losers and are ineffective in reducing current account imbalances, Bundesbank President Jens Weidmann said on Thursday.
The United States stepped up pressure on China this week by imposing a new set of tariffs on Chinese products but media reports suggest that the U.S. administration is inclined to put off a decision on imposing car tariffs, which could impact its relationship with Germany, Europe’s biggest car producer.
“Some expect higher tariffs to reduce current account balances,” the head of Germany’s central bank said in a speech in Hamburg. “But this hope may prove futile, our analyses suggests.”
Weidmann, a candidate to succeed Mario Draghi as president of the European Central Bank later this year, added that new tariffs actually put the U.S. economy at risk.
“Retaliatory tariffs of other countries are likely to further weaken the global economy and world trade. Trade wars only know losers,” he added.
Reporting by Balazs Koranyi; Editing by Gareth Jones