The trade war could export China’s deflation to Europe warns Klaas Knot. China could start selling its goods to Europe at reduced prices if the US launches a trade war by imposing new tariffs, according to the European Central Bank board member.

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

“We already see this happening in the steel market,” he said. “In this way, China is exporting, in a way, its deflation to us.” Policymakers around the world are watching the U.S. for possible trade levies when Donald Trump returns to the White House in January. The incoming US president has vowed to impose tariffs on other countries, with China at the top of his list.