Lagarde Questions Trump’s Manufacturing Strategy

(Reuters) – U.S. President Donald Trump’s strategy to boost domestic manufacturing by imposing trade barriers is under scrutiny. European Central Bank President Christine Lagarde commented on Wednesday that this approach may be questionable due to the U.S. economy’s current state.

Lagarde explained, “This theory of substitution, in other words that I will lower imports from Europe to beef up manufacturing at home, is questionable, because the U.S. economy … is almost running hot at the moment.” This statement was made during an interview with CNBC in Davos.

She highlighted that with unemployment low and capacity constrained, establishing additional manufacturing capabilities would require significant time.