European Central Bank member: China may export its contraction to us due to Trump’s trade tariffs.

European Central Bank Governing Council member Klaus Knot warned of the potential negative impact of tariffs that U.S. President-elect Donald Trump is planning to impose on the Eurozone economy, which he described as "China exporting its economic contraction to Europe."

Knot mentioned that the high tariffs Trump may impose on Chinese goods could push China to start selling its products to Europe at reduced prices to counter the effects of the global trade war - initiated by the U.S. with the new tariffs - on local growth in China.

The ECB member emphasized that China has been following this approach in some goods for a long time, referring to its policies in the steel market, stating that in this way, China is exporting its contraction to the European Union.

Referring to recent statements from the Chinese government that support this scenario, Knot noted that Chinese President Xi Jinping made it clear that China is ready to take any action against the negative impacts that may arise from the tariffs imposed by the United States.

This comes after European Central Bank Vice President Luis de Guindos stated earlier this month that the trade war ignited by the new U.S. tariffs would significantly affect the economic expansion of the Eurozone.