ECB’s Rehn: ‘Cannot Lie Down’ in Front of US Trade Threats, Must Take ‘Proportionate Policy Measures’

4 February 2025

ECB’s Rehn: ‘Cannot Lie Down’ in Front of US Trade Threats, Must Take ‘Proportionate Policy Measures’
Olli Rehn, governor of the Bank of Finland, at the 8th ESRB annual conference in Frankfurt on September 27, 2024. Photo by Adrian Petty/ECB under CC BY-NC-ND 2.0.

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Olli Rehn on Tuesday called on the European Union to respond in kind to any negative trade measures aimed at the EU by US President Donald Trump.

‘The last thing we need is a new trade war between allies but we need to take proportionate policy measures’, he said.

The main objective should be a ‘negotiated solution’, he said, but failing that, ‘we cannot lie down’.

‘If you ask economists, the majority would say that it would be better for everybody not to retaliate. But this is not only economics, this is mostly politics’, he was quoted as saying.

‘Tariffs will hit most American consumers and will have an inflationary effect on the US economy’, he said.