Fed’s Powell Says Trade Barriers Threaten Wages and Growth
- “In general, countries that have remained open to trade, that haven’t erected barriers including tariffs, have grown faster. They’ve had higher incomes, higher productivity. Countries that have gone in a more protectionist direction have done worse.” – Powell
- The Fed chairman also said concerns about trade policy “may well” have an impact on wages and capital expenditures.
- The IMF has said world output could drop by about 0.5% below its projected level by 2020 if threatened trade barriers become reality.
- Powell is still largely optimistic on the economy given low unemployment and inflation around the target but has said it will be difficult to predict how tensions will shape the economic outlook.
Europe Exploring Talks With Trump on Car-Tariff Cut
- Juncker will likely signal the EU’s willingness to consider a deal that cuts levies on cars and car parts among all the major automobile-exporting countries.
- Such a deal, which would have the potential to upend the auto industry, would take time to complete and officials said they aren’t optimistic Trump would accept it.
- Washington has already hit the EU with duties on its steel and aluminium exports using the same national-security justification as the potential tariffs on cars and car parts.
- The EU isn’t allowed under global rules to reduce its 10% tariff on American cars unless it either does so for WTO members as a whole or reaches a bilateral accord with the U.S. that covers “substantially all” two-way trade.