President of the European Central Bank on global economy

WASHINGTON (CBS, KYMA) - Christine Lagarde, President of the European Central Bank, with Margaret Brennan on Face the Nation Sunday about the state of the global economy.

"[It is in] transformation, I think caused by a couple of things. One is the tariffs, which have changed the map of trade around the world and reconstituted new alliances and reformed the way in which we trade with each other. I think the second major transformation is the impact of artificial intelligence on everything we do from data management to dating and everything in between."

Christine Lagarde, President of the European Central Bank

According to Brennan, S&P Global says President Donald Trump's tariffs are going to cost businesses around the world of up to $1.2 trillion this year, with Lagarde saying many economists overestimated the impact of the president's tariffs.

This prompted Brennan to ask Lagarde if she thinks we've moved past the point of risk or if we have yet to feel the pain, to which Lagarde said:

"I think we're yet to feel the pain. What we observe, I'll give you some numbers. From Europe to the United States, our goods to the U.S. consumers had a tariff of 1.5. With the tariff that was decided by the U.S. administration, it's gone up to 13%. So the question is, where does this additional 11-ish percentage point go? At the moment, it's one-third on the exporter, so the European company, one-third of the U.S. importer and one-third of the consumer. What will happen, though, is that these two-thirds borne by two corporates, essentially, the exporter and the importer, is based on a squeeze of their margins. How long are they going to put up with a squeeze of the margin, to be seen. And when they don't, because it's becoming too tight, then it will be on the consumer. So it's a question of time."

To watch more of Brennan's interview with Lagarde, click here.