Reaction From the Federal Reserve on Trump’s Proposed Trade Tariffs

Officials from the Federal Reserve stated on Wednesday that uncertainty over a potential “trade war” from Trump’s trade tariffs could affect economic policy. The nation’s central bank needs to take a “wait-and-see” approach regarding the potential impact of any new trade tariffs imposed by the Trump administration, states Raphael Bostic, who is the president of the Atlanta Federal Reserve Bank.

One of the most influential and powerful fed governors, Lael Brainard, stated that new tariffs could cause great uncertainty about the future of any potential fed decisions. Brainaird stated that although tariffs could pose a problem, it is too early to say what tariffs would do the U.S. economy.

Robert Kaplan, the president of the Dallas Federal Reserve Bank, stated that hurting the relationships with some of the United States most important trade partners, such as Canada and Mexico, would not be in the best interests of the country.

Donald Trump plans to formally impose tariffs on aluminum and steel manufacturers that export their products to the United States. Trump has stated the tariffs would apply to every country in the world. Trump’s plan is to impose a tariff, or tax, of 10 percent on imported aluminum and 25 percent on steel.

Some economists fear the tariffs could lead to a trade war between the U.S. and countries that export goods to the states. A trade war starts when another country imposes tariffs on goods imported to their countries from the United States.

U.S. Economy Doing Well For 84 Months

Since 2010, the United states economy has been adding jobs. And doing so for consecutive 84 months. Unemployment seen nearly a decade ago has vanished. But, not every sector is benefiting from economic growth, MarketWatch reports. When it comes to retail, the jobs there have been disappearing at a rate of 6,600 per month.

Retailers are cutting staff, and even closing shops, due to intense competition coming from Internet-based retailers, especially Amazon. General merchandise, health, and electronics stores are among the ones that have suffered for a while from the hands of Amazon and the likes. Now, even grocery stores are shedding jobs.

Meanwhile, manufacturing and mining industries are recovering and creating jobs. This is due to a fall in the value of a dollar, thus making exports cheaper for foreigners. Also, commodity prices have stabilized, so miners, especially in the oil industry, are increasing production.

However, jobs in the traditional information industries are disappearing. Since 2001, due to the advancement of the internet, a million jobs in broadcasting, telecommunications, and traditional publishing have been lost.

The advancements in Artificial Intelligence are also likely to bring disruptions in employment. Automation is likely to destroy, as well as create, jobs in manufacturing and service industries. Now, even some paralegal and accounting jobs are threatened as more advanced system come to the marketplace. But, so far, the economy is doing well. Is that the quiet before the storm?