China may start selling its products to Europe at discounted rates if the US starts a trade war by imposing new tariffs, according to European Central Bank Governing Council member Klaas Knot.

In such a situation, “there is a chance that the Chinese will start offering their goods in Europe at lower and lower prices,” Knot said in an interview published in Dutch newspaper Volkskrant on Monday.

“We are already seeing that happening in the steel market,” he said. “In this way, China is, as it were, exporting its deflation to us.”

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