European Central Bank president on SCOTUS decision and support for Jerome Powell

WASHINGTON (CBS, KYMA) - Christine Lagarde, President of the European Central Bank (ECB), spoke with Margaret Brennan on Face the Nation Sunday about the Supreme Court striking down President Donald Trump's sweeping use of tariffs.

In a 6 to 3 ruling Friday, the Supreme Court struck down President Trump's sweeping tariff agenda, writing that the International Emergency Economic Powers Act does not authorize the president to impose tariffs.

However, the president said Saturday he's going to issue "legally permissible tariffs," and said he doesn't need to go to Congress.

According to Brennan, German Chancellor Friedrich Merz said tariffs harm everyone and "the biggest poison for the economies of Europe and the U.S. is this uncertainty about tariffs."

This prompted her to ask Lagarde if she heard and get any clarity from U.S. Trade Rep. Jamieson Greer about what's going to happen next, to which Lagarde said:

"I'm not so sure...I think it's critically important that all people in the trade, both outside of the United States, but also in the United States, have clarity about the future of the relationships. Because, you know, it's a bit like driving. You want to know the rules of the road before you get in the car. It's the same with trade. It's the same with investment. You want to know what the rules are, and you want to avoid having to, you know, come back and claim tariffs back. Because this is just not the purpose of people doing business. They want to do business. They don't want to go into legal lawsuits. So I hope it's going to be clarified, and it's going to be sufficiently thought through, so that we don't have, again, more challenges, and the proposals will be in compliance with the constitution, in compliance with the law."

Brennan followed up by saying there will be emergency meetings about the Supreme Court's decision, and how this will affect current trade deals, leading her to ask if the trade deals are in jeopardy, and Lagarde said:

"I'm no longer trade minister. I used to be. So I don't know what the outcome of those meetings will be, but it's not as if it was sort of straightforward 15% across the board. There are also exemptions, there are carve outs, there are areas for which there is no tariffs. So I think if it shakes the whole equilibrium which people in the trade had got used to because they continued trading after the April decisions and the July trade arrangement between the U.S. and Europe, but to sort of shake it up again is going to bring about disruptions in the business for sure."

Bringing up a previous interview from October of last year, Brennan said Lagarde said the global economy had not yet felt the pain of the tariffs when asked about its impact.

This led Brennan to ask if we, along with the consumer, avoided the pain, and Lagarde said:

"I don't think the consumers avoided the pain. And I think that there are many studies that are being completed now to determine what is the impact and where is the burden of tariffs. And I think that while some some exporters have borne some of the brunt, most of it was borne by the U.S. importers and eventually, the U.S. consumers, because the U.S. importers have squeeze their margins a bit to absorb some of these additional cost due to tariffs. But there is a point where you don't squeeze your margins so much, and you have to pass it on to the consumers. I think this is what we are. We are beginning to see, and, you know, multiple studies and very serious people are looking into this. We are trying to look at the data ourselves to make sure what impact it has on trade and on our economies. And this is a continuous process which is clearly going to be a bit disrupted by the current development."

During the interview, Brennan and Lagarde talked about the latter's role in defending Fed Chair Jerome Powell after the Justice Department launched an investigation into him.

Brennan also said Powell is set to be replaced by Kevin Warsh, and said he was someone Lagarde knew from her time as Trade Minister.

When asked if she believes Warsh can resist political pressure from the president, Lagarde said:

"First of all, I have enormous respect for Powell, for Kevin Warsh and for fed chairs in the past, and I'm very proud to receive an award tomorrow in the name of Paul Volcker. You know, for monetary policy, the rule of law is critically important, and the independence of a central bank is critically important. We have seen in history, we have seen in literature, we have seen in, just, anything that analyzes the activity of a central bank, be it the Fed, be it the ECB, that the independence matters a lot. Why is that? Because you don't want someone who sets interest rates, who has in charge price stability and financial stability, you don't want that person to be under political influence. And the decisions that we make generally do not impact right away. They produce an effect six, 12, 18 months, sometimes two years down the road. In the meantime, the political life continues, and we have to be, in a way, immune to that. That's why many central bankers around the world signed this support to central bank independence as applied to Chair Powell."

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