WASHINGTON: US businesses already are being hurt by the exchange of tariffs on key products, Federal Reserve Chairman Jerome Powell said Wednesday.
However, he repeated that if President Donald Trump's trade policy resulted in lower tariffs, that would be good for the US economy.
"We hear from our extensive network of business contacts a rising chorus of concerns," he said in his semi-annual testimony to the House Financial Services Committee. "Lots and lots of individual companies have been harmed by this."
Although the impact will take time to show up in data on the broader economy, Powell cautioned that rising business concern was impacting investment decisions.
Following Powell's testimony, the Fed released a nationwide survey, the "beige book," according to which businesses across the country were unnerved by Trump's tariffs, with many reporting rising prices and supply chain disruptions.
Washington has imposed steep tariffs on tens of billions of products from China, and has threatened to target hundreds of billions more, on top of import taxes on steel and aluminum that have angered allies and prompted retaliation.
Powell refused to answer a question on whether the United States was in a trade war but he said protectionism was detrimental to the economy.
"The bottom line is a more protectionist economy is less competitive, less productive," he said. "This is a torch we've been carrying around the world for 75 years."
The administration says it wants lower tariffs and "that I think would be good for the economy."
Reacting to the Fed's beige book survey, White House Press Secretary Sarah Sanders told reporters on Wednesday the administration was aiming at a larger prize, further into the future.
"The president is focused on long-term economic principles," said Sanders. "This is short-term.
Comments
Comments are closed.