“China could start selling its products to Europe at lower prices if the United States starts a trade war with new tariffs,” Klaus Knot, a member of the European Central Bank’s governing council, said.
In such a case, “there is a chance that the Chinese will start offering their goods in Europe at lower and lower prices,” Knot said in an interview published by the Dutch newspaper Volkskrant on Monday.
“We are already seeing this happening in the steel market. In this way, China is exporting its deflation to us,” he added.
Policymakers around the world are watching the United States for potential trade tariffs when Donald Trump returns to the White House in January. The incoming US president has vowed to impose tariffs on other countries, and China is at the top of his list.
