World Bank warns Donald Trump to be 'careful' on tariffs

Kristalina Georgieva (above) said Trump should "assess the implications" before going ahead.
Kristalina Georgieva (above) said Trump should "assess the implications" before going ahead.PHOTO: EPA-EFE

BRUSSELS (AFP) - The chief executive of the World Bank urged US President Donald Trump on Thursday (March 8) to be "careful" before imposing steel and aluminium tariffs and weigh up possible effects on global trade.

Kristalina Georgieva said Trump should assess the "implications" before going ahead with a plan that has sparked fears of a trade war with China and Europe and spooked world markets.

"We certainly hope that there will be a careful assessment before any further steps are taken," Georgieva told reporters when asked if she had a message to Trump, who is expected to sign off on the tariffs later on Thursday.

"Because there is a law of unintended will take a step for a reason, but you need to project a couple of steps further down the road what may be the implications of that actions," the Bulgarian former EU commissioner added.

The EU has vowed to retaliate against the tariffs with its own measures targeting not only US steel but also products such as bourbon whiskey, jeans, motorcycles, orange juice and cranberries.

Georgieva, whose organisation specialises in lending money to poor countries, added that Trump should take a "carefully calibrated approach to what happens in world trade."

"When trade shrinks it has implications for the poorest populations in rich countries. The goods are more expensive and poor people spend more of their money buying these goods," she said.

Trump himself appeared to hint at carve-outs on Thursday, vowing that the tariffs which he says are aimed at saving the US steel industry and cutting its deficit would show "great flexibility" to "real friends." He added that they would be "very fair".

European Commission Vice-President Jyrki Katainen said during the same interview that Trump's actions risked causing a shock to the global economy.

"There are no winners in this trade war," he said.

"The rest of the world must adapt to the situation and try to influence the US administration's behaviour."