MADRID (Reuters) -Geopolitical and commerce tensions stemming from U.S. tariffs pose a threat to the soundness of the worldwide monetary system and to world financial development, European Central Financial institution policymaker Jose Luis Escriva warned on Tuesday.
U.S. President Donald Trump has repeatedly threatened an array of punitive measures towards buying and selling companions, solely to revoke a few of them on the final minute, baffling world leaders and spooking enterprise executives.
Escriva noticed the unpredictability of the Trump administration’s insurance policies, from commerce to wider economic system, as one of many dangers defining the worldwide atmosphere, with “attainable deterioration of worldwide buyers’ confidence within the U.S. economic system” additionally producing uncertainty.
“All these components have a decisive impression on the worldwide development outlook and pose dangers to the soundness of the worldwide monetary system,” Escriva, who additionally chairs the Financial institution of Spain, wrote in its annual report.
A rise in tariffs would negatively have an effect on world exercise, significantly in the US, and to a lesser extent within the euro zone and Spain, Escriva mentioned, citing an evaluation of a number of situations.
He nonetheless recognized clear downward dangers for the approaching quarters for Spain in an unsure atmosphere.
“Though Spain’s direct commerce publicity to the US is comparatively restricted, oblique hyperlinks by means of world provide chains, in addition to world monetary and confidence channels, are vital and have to be monitored rigorously,” Escriva mentioned.
If the ‘reciprocal tariffs’ introduced by Trump final month had been lastly carried out, the common tariff paid by Spain on its exports to the US would enhance to 18% from 12% now, he added.
(Reporting by Jesús Aguado, modifying by Andrei Khalip)
