21-08-2019 08:42 PM
The number of readings: 20
Orbit Agency –
BEIJING (Reuters) – The United States imposed tariffs on China and weakened the dollar by cutting interest rates will not correct the trade deficit, economists said on Wednesday.
In an unusually frank language, experts ‘views appeared to target US President Donald Trump, who has called for the Federal Reserve to continue to cut interest rates to weaken the dollar and stimulate the economy, as well as impose a set of tariffs on China to reduce the deficit, which he describes as’ theft’.
The IMF’s chief economist, Gita Gopinath, stressed that US policies are counterproductive and will not produce the desired results and will slow the global economy.
Gopinath warned in a blog titled ‘Taming the Currency Flurry’, prepared in collaboration with IMF researchers, Gustavo Adler and Luis Copedo, that ‘mutual tariff increases are unlikely to reduce trade imbalances, because it mainly leads to the diversion of trade to other countries’. .
“Instead, these steps are likely to hurt domestic and global growth because they will undermine business and investment confidence, disrupt global supply chains, and raise product and consumer costs,” she said.
She pointed out that any plans to weaken the value of the US currency ‘difficult to implement and will probably be ineffective’, adding that putting pressure on the central bank will not achieve that goal.
The authors also warned that ‘should not pay much attention to the view that easing monetary policy will weaken the country’s currency in a way that leads to a permanent improvement in the balance of trade’, stressing that ‘monetary policy alone will not lead to a permanent devaluation of the currency, which is necessary to achieve That result, especially in 12 months. ‘
Trump has imposed stiff tariffs on Chinese goods worth 250 billion dollars and plans to impose new tariffs on imports of 300 billion dollars in two more rounds on Sept. 1 and December 15.
Though the IMF and others warned that Trump’s trade war was slowing global growth, and with signs of a possible contraction in the US economy, Trump had stepped up attacks on the Fed and China.
Last month, the International Monetary Fund (IMF) again lowered its outlook for global growth and said trade tension would make 2020 risky as tariffs could further slow China’s economy.