Home US: Could tariffs backfire? – NBF
FXStreet News

US: Could tariffs backfire? – NBF

Krishen Rangasamy, analyst at National Bank Financial, suggests that the tariffs and threats dispensed by the U.S. last year have already come back and influenced Fed policy.

Key Quotes

“Governor Powell’s softening stance is in no small part attributed to concerns that the ensuing global economic slowdown could have repercussions in the U.S. But there’s also a more direct channel through which U.S. tariffs could backfire. And here we’re not talking about retaliatory tariffs from slighted trade partners (just ask American farmers) but focussing instead on the broader domestic economy that derives value from trade.”

“According to the Federal Reserve Bank of San Francisco, the local content of imports into the U.S. averages roughly 43%. Put simply, 43% of U.S. spending on goods imported from foreign countries stays in America either through payments to retailers or for logistics.”

“The local content of imported “made in China” goods is even larger at 56%. As such, the U.S. can expect further collateral damage at home if the trade war with China intensifies.”

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.