(Bloomberg) -- The euro area must not lose its nerve over trade tensions with the U.S., and Europe needs to stay united as President Donald Trump calls into question the world order, ECB Executive Board member Benoit Coeure said at an economic forum on Sunday.
Tariffs are not the most important issue, Coeure said days after Trump imposed levies on $34 billion of Chinese imports, prompting Beijing to retaliate as the world’s two biggest economies exchanged their first blows.
“It’s absolutely necessary to resist the temptation of euro pessimism or a feeling of powerlessness of Europe versus China and the U.S.,” Coeure told an audience in Aix-en-Provence, in southern France.
“It’s true that the world order is profoundly called into question,” he said. However, Europe had “unique tools to respond” if it could overcome its divisions.
China has accused the U.S. of igniting the largest trade war in economic history, with Trump indicating the final tariff total could exceed $500 billion. In Europe, German carmakers have been in the spotlight, and the European Union is working on a joint position for talks on tariffs that may include automobiles.
Coeure said the most important issues with China were intellectual property, access to markets and government contracts, all of which have a significant political dimension.
The EU’s infrastructure, values and political consensus put it in a “very strong position to tackle these issues,” he said.
“Europe is the largest economic force in the world” thanks to its market and its regulation capacity, Coeure said, adding that it was crucial to reinforce the euro-area economy to give it the means to defend itself, welcome migrants and have a stronger voice on international matters.
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