Trade policy uncertainty driven by the Trump administration's escalating di...
SAN FRANCISCO - Trade policy uncertainty driven by the Trump administration’s escalating dispute with China means hundreds of billions of dollars in lost U.S. output and as much as $850 billion lost globally through early next year, research published this week by the Federal Reserve suggests.
The Fed researchers analyzed newspaper articles and corporate earnings calls to estimate trade policy uncertainty, finding it has recently “shot up to levels not seen since the 1970s.” The Fed researchers then estimated the blow such uncertainty delivers to economic activity, as businesses pull back on investment and production. They concluded that globally and in the United States, its impact is around 1% to GDP.
In an effort to win better trade terms, the Trump administration has jacked up tariffs on hundreds of billions of dollars of Chinese imports and imposed or threatened to impose duties on imports from other trading partners, including Mexico and the European Union. China and other countries in turn have threatened or imposed their own tariffs on U.S. goods.
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