Fed chairman: higher tariffs are bad for the US economy.
Issue Time:2018-07-20
International online report (China Radio Station Zhao Xinyu): President of the Federal Reserve Board of the United States Powell 17 in the Senate hearing said that the best way is to continue to gradually increase the federal fund interest rate. For the high-profile trade issue, Powell said it is hard to predict the impact of the current trade policy on the economy, but long-term high tariffs are not good for the economy.

Powell, who was chairman of the Federal Reserve in February this year, attended a half - year hearing in the Senate Finance Committee on 17 days, and spoke on the US monetary policy. Powell's testimony in the US economic prospects, the Fed continues to increase interest rates, inflation has reached 2% of the target, financial regulation and other contents of previous public statements consistent with the previous. While talking about trade issues, Powell said that it is still unpredictable that trade has an impact on the future of the economy: "of course, the real economic growth we experience is often stronger or weaker than our best forecasts. For example, it is difficult to predict the final outcome of the current discussion on trade policy.

However, in view of the United States' initiative to trade disputes with many trading partners including the EU, Canada, Mexico, Japan and China since last year, senators attending the day of the hearing have constantly concentrated the problem on tariffs. Powell said the tariff related issues were in the head of Congress, but in view of the impact of the tariff on the economy, he argued that, in principle, the economic growth of the countries pursuing open trade was faster: "generally speaking, those countries that are open to trade and do not have barriers including tariffs are growing." Faster, higher income and higher productivity. And those countries that go further in the direction of protectionism are worse. This is an empirical conclusion. "

Although Powell tried to avoid an assessment of the current trade policy of the Trump administration, he also acknowledged that trade uncertainty could detrimental to us wage growth. And America's labor productivity and exports are all in the world, and high tariffs are bound to hurt the United States: "(now) it's hard to say what the results will be. There has been no such widespread trade dispute in my past career. I do not see the overall information of all the major trading partners, it is hard to say the next development results. If the final result of trade friction is to lower tariffs, that is a good thing for the economy. If it leads to a broader tariff in the field of trade in goods or services, and to maintain high tariffs for a longer period of time, it will have a negative impact on us and other economies. "

On the 16 day, the International Monetary Fund (IMF) warned that, according to the existing model, it would lead to a decline in business confidence if the current tax threat was gradually turned into reality, and global output could be 0.5% lower than the current forecast by 2020.
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