Interview: Increasing tariffs harm global growth, says eurozone bailout fund chief

Higher tariffs could lead to rising prices, inflation and reduced consumer purchasing power, all contributing to a sluggish global economy and strained Europe-U.S. relations.

BEIJING, March 27 (Xinhua) -- Increasing tariffs could have negative consequences for global trade and economic growth, particularly between Europe and the United States, said the chief of eurozone bailout fund on Tuesday.

"International trade has been the engine driving global growth. If we slow down international trade -- because that's what tariff increases will achieve -- we will reduce growth around the world," Pierre Gramegna, managing director of the European Stability Mechanism, told Xinhua.

Gramegna warned that higher tariffs could lead to rising prices, inflation and reduced consumer purchasing power, all contributing to a sluggish global economy and strained Europe-U.S. relations.

"Protectionism would only make things worse for global growth," he added.

Gramegna, who had served as Luxembourg's finance minister, said negotiation is the best approach when there is willingness on the other side. "It's in the hand of the European Commission to devise what is the best answer," he said.

Regarding China's role in global trade, Gramegna said, "China and Europe share many values when it comes to trade," including a commitment to multilateralism and the World Trade Organization.

Official data show that the EU stands as China's second-largest trading partner, ranking high in both imports and exports. Likewise, China is the EU's second-largest trading partner, primary source of imports and third-largest export destination. "This underscores the economic interdependence between the two regions," Gramegna noted.

Gramegna called for stronger financial cooperation between China and Europe to enhance global economic stability. "Boosting bilateral trade is a confidence-building measure that would set a positive example for the world," he said.

As global trade faces growing uncertainty, leaders from China and Europe are pushing for solutions that reinforce economic stability and cooperation. "Dialogue and the rule of law should guide international relations," Gramegna said.■