The head of the Federal Reserve made it clear that he considers it a mistake to raise the tariffs on goods
The head of the Federal Reserve made it clear that he considers it a mistake to raise the tariffs on goods.
During the semi-annual report in Congress on July 17, the head of the Fed Powell was asked the main question of recent months: What does he think about the increase in trade duties on imports to the United States?
The head of the Fed, for obvious reasons, did not speak with harsh criticism of the increase in duties, which the US President Trump insists on. However, diplomatically, but very clearly, he made it clear that the best situation was minimal trade barriers.
Powell noted that the administration had previously stated that its goal was to reduce trade barriers (in fact, this was rarely stated).
The head of the Fed was asked what he thinks about the fact that the North American trade partnership is in uncertainty and that the US has not signed an agreement on the Trans-Pacific trade cooperation. The head of the Fed declined to comment on trade policy. But he said that low duties are the best situation for the economy. There should be no prohibitive duties, there should be no trade barriers. The previous period was a period with very low duties.
PS: Low duties, of course, are good for consumers and importers. It is not clear, however, how else, other than duties, to deal with a significant US-China trade deficit if there is no possibility to reduce the dollar’s exchange rate to the yuan?
I would also like to hear what the head of the Fed thinks about the problem of the huge US debt (more than 100% of US GDP, or 21 trillion dollars by mid-March 2018)? The Fed is not responsible for tax policy, but the national debt poses risks to the stability of the US economy. We know that the current growth of the US economy will be spurred by tax cuts according to the plan of Trump and the Republicans. But it will increase the budget deficit and further increase the US public debt.