European Central Bank (ECB) President Christine Lagarde has issued a stark warning about the dangers of protectionism and coercive trade measures, urging global powers to step back from escalating tensions that are disrupting markets and threatening global supply chains.
Speaking in Beijing on Wednesday during her official visit to China, Lagarde emphasized the need for international cooperation, calling for a de-escalation of trade conflicts and the preservation of multilateral trade frameworks.
“Coercive trade policies are far more likely to provoke retaliation and lead to outcomes that are mutually damaging,” Lagarde said in a speech at the People’s Bank of China.
The ECB chief’s visit coincided with ongoing efforts to repair strained relations between Washington and Beijing, as well as China and the European Union, both of which have faced increasing scrutiny and tariffs from the United States under President Donald Trump.
While the latest round of high-level China-US trade talks in London ended with a framework agreement aimed at reducing tensions, Lagarde cautioned that geopolitical disagreements should not be allowed to undermine global economic cooperation.
“All countries should examine how their structural and fiscal policies can be adjusted to reduce their own role in fuelling trade tensions,” she said.
She emphasized the need to protect the rules-based global trading system, which she said had “greatly benefited” economies worldwide. Lagarde also warned that the current trajectory of protectionism could “erode the foundations of global prosperity.”
EU-China Relations in Focus
Lagarde’s visit also comes amid efforts by Beijing and Brussels to stabilize relations and strengthen economic ties in the face of shared concerns over Trump’s trade agenda.
President Trump has recently threatened to impose further tariffs on the European Union, accusing the bloc of unfair trade practices and delaying negotiations.
In response, China and the EU are preparing to host a high-level summit next month, which will mark the 50th anniversary of diplomatic relations between the two. The agenda includes discussions on:
- Setting minimum pricing standards for Chinese electric vehicles entering European markets.
- Establishing a “green channel” for the export of rare earth minerals from China to the EU.
The summit is being framed as a platform to align on shared climate and economic priorities while reducing trade friction.
