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Investing.com -- The Bank of France’s head, Francois Villeroy de Galhau, has warned that rising tariffs will weaken economies worldwide.
He expressed this concern during a meeting with financiers in Brussels. Villeroy also voiced hope that future government decisions will consider the benefits of trade more thoroughly.
On Thursday, Villeroy drew attention to recent increases in government bond yields, stating that they represent a tightening of financial conditions. He suggested that policymakers should take these changes into account, given that all other factors remain constant.
The Bank of France’s head spoke shortly after President Trump introduced a new 25% tariff on automobile imports. Villeroy warned that this move, along with previously announced duty increases, would lead to financial hardship for Americans and exacerbate inequality.
Villeroy expressed a strong hope for a return of reason to the debate, stating, "Trade is about creating value together. This is a lose-lose game."
He further emphasized that rising tariffs are "bad news for everyone."
Despite his overall concern, Villeroy suggested that there could be some benefits for Europe due to the increased unpredictability of U.S. policy.
He said, "If there is more unpredictability on the U.S. side, it makes the U.S. market less attractive, so it could be an incentive to use a bit more European resources for European investment."
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