Quantcast
Connect with us

US economy faces long-lasting damage from Trump’s trade war: fed official

Published

on

The trade conflict of the past two years likely left a mark on the US economy, even with the recent agreement to defuse the situation, a Federal Reserve official said Monday.

The outbreak of the new coronavirus in China adds another risk factor to the outlook, which otherwise seemed poised to provide steady growth, said Loretta Mester, president of the Federal Reserve’s regional bank in Cleveland.

ADVERTISEMENT

“At this point, it is difficult to assess the magnitude of the economic effects, but this new source of uncertainty is something I will be carefully monitoring,” she said of the epidemic.

With the partial agreement signed with China to call a truce in the dispute with Beijing — despite leaving many tariffs in place — as well as a new continental free trade pact with Canada and Mexico, Mester said the trade picture is “somewhat better” heading into 2020.

“Nevertheless, some long-lasting effects arising from the trade war are likely,” she said in a speech to the National Association for Business Economics.

While the reduced uncertainty means businesses that had put plans on hold might now be more likely to invest, some foreign companies “have reoriented their supply chains away from US firms, which means these exports may be permanently lost.”

Sluggish investment, too, is a source of concern.

ADVERTISEMENT

“Without investment in new technologies and capital, productivity will continue to be weak, dampening the economy’s growth potential and living standards.”

Mester, a voting member of the Fed’s interest rate setting committee this year, was relatively upbeat about the economy, which she said should continue to perform well with a strong job market and growth around two percent, slightly slower than last year.

The epidemic in China casts a cloud of uncertainty over the outlook, she cautioned, and is hard to compare with past health issues, like the SARS epidemic in 2003, which caused a minor slowing in the US economy.

ADVERTISEMENT

“China was not as big a player in the global economy back then as it is today, so there is the potential for a larger impact,” if supply chains are disrupted or investment postponed, she said.

“On the other hand, China now has more resources with which to address the epidemic than it had in 2003,” which might mean “less protracted” damage to the economy.

ADVERTISEMENT


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

‘Trump became what we feared’: New Lincoln Project ad accuses Trump of using the Bible as a prop to boost his polls

Published

on

A brutal new ad from the GOP group The Lincoln Project called "War Zone" is attacking President Donald Trump for becoming what Americans have feared he would.

He didn't come out of hiding this week to help calm the nation or to bring Americans together.

"He wasn't there to offer words of calm and comfort," the ad said. "Instead, he became what we all feared. Evoked the worst of our past. Threatened our governors and states. He ordered our own soldiers who fought in Iraq and Afghanistan to flood the streets, instructing them to turn against Americans. Used churches and the Holy Bible as political props. He didn't invoke the Lord to give us wisdom, but to boost his polls."

Continue Reading

Breaking Banner

James Mattis takes swipe at Trump: We have gone ‘three years without mature leadership’

Published

on

On Wednesday, The Atlantic reported that President Donald Trump's former Defense Secretary James Mattis has written a furious condemnation of the president, saying he is incapable of "mature leadership" and accusing him of deliberately trying to turn Americans against one another.

“I have watched this week’s unfolding events, angry and appalled,” wrote Mattis, according to the article. “The words ‘Equal Justice Under Law’ are carved in the pediment of the United States Supreme Court. This is precisely what protesters are rightly demanding. It is a wholesome and unifying demand — one that all of us should be able to get behind. We must not be distracted by a small number of lawbreakers. The protests are defined by tens of thousands of people of conscience who are insisting that we live up to our values — our values as people and our values as a nation ... We must reject and hold accountable those in office who would make a mockery of our Constitution.”

Continue Reading
 

Breaking Banner

Internet reacts as Obama breaks silence on George Floyd: ‘Great to hear from a real president’

Published

on

On Wednesday, former President Barack Obama gave an address on the killing of George Floyd and the nationwide protests against police brutality — giving words of encouragement to peaceful demonstrators and calling for major structural reform to heal the divisions between police and the communities they serve.

Barack Obama: "As tragic as these past few weeks have been, as difficult and scary and uncertain as they've been, they've also been an incredible opportunity for people to be awakened to some of these underlying trends and they offer an opportunity for us to all work together..." pic.twitter.com/wLBhmRy4aT

Continue Reading
 
 
You need honest news coverage. Help us deliver it. Join Raw Story Investigates for $1. Go ad-free.
close-image