New York — A trade war would leave the US Federal Reserve having to decide between battling weaker economic growth or rising prices. Which one it focuses on already looks pretty clear. President Donald Trump’s administration has proposed tariffs on imported steel and aluminium, from which a number of US allies would be exempt, and has threatened to slap additional measures on as much as $150bn of Chinese goods. Higher and broader tariffs would raise the prices of those imports, potentially fanning US inflation, while reducing economic activity by sapping confidence and tightening financial conditions. Minutes of the US central bank’s March 20-21 policy meeting, published on Wednesday, showed "a strong majority of participants viewed the prospect of retaliatory trade actions by other countries, as well as other issues and uncertainties associated with trade policies, as downside risks for the US economy". For Fed officials, those concerns seem to far outweigh the one-time increase in...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.