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A US-EU trade war would be a political and economic mistake, says French finance minister

Key Points
  • With global growth already slowing down, starting a trade war now between the U.S. and the European Union would be both a political and economic mistake, according to French Finance Minister Bruno Le Maire.
  • In two Twitter posts this week, U.S. President Donald Trump hit out at the EU, even calling the bloc "a brutal trading partner."
  • "There are trade tensions between the U.S. and China. We should not add trade tensions between the U.S. and the EU, it will be a political mistake and an economic mistake too," Le Maire said.
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With global growth already slowing down, starting a trade war now between the U.S. and the European Union would be both a political and economic mistake, French Finance Minister Bruno Le Maire said Thursday.

That warning came in response to a question from CNBC about whether Le Maire felt worried that the next leg of a global trade war will center on the U.S. and the EU. In two Twitter posts this week, U.S. President Donald Trump hit out at the bloc, declaring it's "a brutal trading partner."

"We have to avoid a trade war. We're facing a slowdown both at the global level and the European level and the reason why there is such an economic slowdown is that there are trade tensions all over the world," the French minister told CNBC's Joumanna Bercetche at the World Bank and International Monetary Fund meeting in Washington.

"There are trade tensions between the U.S. and China. We should not add trade tensions between the U.S. and the EU, it will be a political mistake and an economic mistake too," he added.

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Since taking office, Trump has called out major trading partners including the EU, China and Canada for what he deemed unfair practices that affected American workers and companies. Trump increased tariffs on some U.S. imports, which led to a global trade fight that many governments and analysts blamed for hurting economic activity.

Hubertus Mühlhäuser, the CEO of European-based capital goods firm CNH Industrial, explained that his company had exposure to the U.S. agriculture market and said any escalation with the EU would be concerning.

"We are really allies, we are in the same situation, we have to find a trade deal," he told CNBC's Julianna Tatelbaum on Friday.

"We are very concerned if there's not a trade deal found that the retaliation actions from the Europeans will go against the U.S. farmers and again this is not in the interest of the United States," he added.

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The IMF this week slashed its forecast for global growth for the third time since last October. The fund said the world economy is projected to grow by 3.3 percent in 2019 — down from an earlier forecast of 3.5 percent.

European economies are expected to be among the largest contributors to the global slowdown, according to the IMF. That's coming at an inopportune time for the bloc, according to Pierre Moscovici, European commissioner for economic and financial affairs, taxation and customs.

The region, he explained, is currently preparing for another potential blow: The U.K. leaving the EU without a deal.

The U.K. and the EU earlier this week reached an agreement to once again extend the Brexit deadline until Oct. 31. The next six months should be spent on ensuring the U.K. doesn't crash out of the bloc and slow down the European and global economy even more, Moscovici told CNBC's Bercetche at the same Washington meeting.

"Let's avoid a no-deal (Brexit)," he said. "We must really find a way to live together and for that, a deal — I don't know which deal, it's up to (the U.K.) to say precisely what they want — is much preferable to no deal."