ECB’s Knot: Tariffs to Be Deflationary in Short-Term But Raise Prices in Longer Run

By Marta Vilar – MILAN (Econostream) – European Central Bank Governing Council member Klaas Knot said on Wednesday that US tariffs would hurt European growth, while the effect on inflation was harder to determine.

In a panel discussion at the Young Factor International Conference in Milan, Knot, who heads De Nederlandsche Bank, said that ‘tariffs have a negative effect on the economy. On inflation, it’s more ambiguous.’

The short-term impact of tariffs on inflation would be to the downside, according to Knot, who said that in the longer term, ‘tariffs themselves tend to raise prices.’

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