European Central Bank President Christine Lagarde has issued a warning that Europe should brace for possible new import tariffs from U.S. President Donald Trump.

Lagarde expects that Trump's tariffs will be more selective and targeted, rather than applying broadly across all imports.

Valdis Dombrovskis, the EU's commissioner for the economy, stated that the EU would respond in a 'proportionate way' if U.S. tariffs threaten its economic interests.

This article is part of a breaking news report and will be updated as more information becomes available.

On January 20, 2025, Trump proposed imposing 25% tariffs on goods imported from Mexico and Canada unless those countries take action against drug trafficking and illegal immigration.

In a recent statement, Trump criticized the European Union, highlighting its significant trade surplus with the U.S. and suggesting that tariffs may be necessary to ensure fairness.

Trump has also announced plans to impose a 10% duty on Chinese imports starting February 1, 2025, as part of his broader trade strategy.

Previously, Trump had indicated he might impose tariffs as high as 60% on Chinese goods to tackle various trade issues, including fentanyl trafficking.

Speaking at the World Economic Forum in Davos, Lagarde praised Trump's decision to delay immediate sanctions, calling it a 'smart approach'.

Despite the looming threat of tariffs, Trump opted against implementing broad tariffs on all nations, a decision that contributed to a positive response in U.S. stock markets on January 21, 2025.

Lagarde emphasized that Trump's choice not to impose blanket tariffs right away was wise, as such measures do not always achieve the intended outcomes.