Trade Uncertainty Likely to Cut U.S. Growth by More Than 1%, Fed Research Says

HayJenn

Former Staff
Jul 2014
72,648
63,971
CA
Uncertainty over trade policy is likely to reduce U.S. economic output by more than 1% through early 2020, new research from Federal Reserve economists suggests.The study is among the first by central-bank researchers to attempt to quantify the effects of the recent escalation of trade-policy uncertainty during the Trump administration. Trump has imposed several rounds of tariffs on China, prompting retaliatory measures by Beijing, as part of broader trade negotiations.

He imposed tariffs on steel and aluminum imports last year. In May, months after concluding a new trade agreement with Canada and Mexico, Mr. Trump threatened to hit Mexico with new tariffs to curb migration at the U.S.-Mexico border. He has also threatened to impose tariffs on Europe. “The rise in [trade policy uncertainty] in 2018 and 2019 has gone hand in hand with a slowdown in world industrial production and global grade,” said the research, which was posted online Wednesday by the Fed’s board of governors.

They then compared increases in these measures of trade-policy uncertainty with movements in industrial output and other financial and economic variables to estimate the effect on gross domestic product in the U.S., in other developed foreign economies and in emerging market economies.

The researchers found that an initial increase in trade-policy uncertainty in the first half of 2018 shaved around 0.8% from U.S. and global economic output in the first half of 2019. They further calculated that more recent increases in uncertainty will now reduce U.S. output by more than 1% in the first half of 2020.

Trade Uncertainty Likely to Cut U.S. Growth by More Than 1%, Fed Research Says

Remember when he promised a 4-5% growth?

I do.
 
Jan 2016
57,388
54,210
Colorado
Uncertainty over trade policy is likely to reduce U.S. economic output by more than 1% through early 2020, new research from Federal Reserve economists suggests.The study is among the first by central-bank researchers to attempt to quantify the effects of the recent escalation of trade-policy uncertainty during the Trump administration. Trump has imposed several rounds of tariffs on China, prompting retaliatory measures by Beijing, as part of broader trade negotiations.

He imposed tariffs on steel and aluminum imports last year. In May, months after concluding a new trade agreement with Canada and Mexico, Mr. Trump threatened to hit Mexico with new tariffs to curb migration at the U.S.-Mexico border. He has also threatened to impose tariffs on Europe. “The rise in [trade policy uncertainty] in 2018 and 2019 has gone hand in hand with a slowdown in world industrial production and global grade,” said the research, which was posted online Wednesday by the Fed’s board of governors.

They then compared increases in these measures of trade-policy uncertainty with movements in industrial output and other financial and economic variables to estimate the effect on gross domestic product in the U.S., in other developed foreign economies and in emerging market economies.

The researchers found that an initial increase in trade-policy uncertainty in the first half of 2018 shaved around 0.8% from U.S. and global economic output in the first half of 2019. They further calculated that more recent increases in uncertainty will now reduce U.S. output by more than 1% in the first half of 2020.

Trade Uncertainty Likely to Cut U.S. Growth by More Than 1%, Fed Research Says

Remember when he promised a 4-5% growth?

I do.
Yeah. That economic growth of 4% or 5% is just another ONE of his many failed promises. He was also going to 'fix' the trade deficit! Hah!