.jpg)
Economists in Wall Street warned on Thursday that the American economy is facing the risk of severe and near -term stagnation as a result of the tariff plans revealed by President Donald Trump last night, with opportunities to slow down and faster inflation, which added to the recession fears in the largest economy in the world.
President Trump revealed what many believe is the largest and most comprehensive in more than a century during the Wednesday event in the garden of roses, which was called “Editing Day”, in detailing the fees between 10 % and 50 % on almost every American trading partner in the world.
Fitch Ratings estimates that the average tariff in the United States will rise to about 22 %, which is the highest level since 1910, with 54 % on goods from China and 20 % on imports from the European Union.
Bill Adams, chief economist at Komerica Bank, said the wide tariff system is likely to equal a 25 % tax increase over goods worth $ 3.3 trillion in the United States every year.
“This is equivalent to the tax increase from 2 % to 3 % (and) is more than twice the rate of effective federal companies,” he said.
Economists at JPMorgan, who called the customs tariff plan “the largest tax increase since the 1968 revenue law”, warned that the wide fees will cost America about $ 400 billion and add up to 1.5 % to the current PCE inflation levels.
The bank added that spending on consumers, the main driver of the economy, could slide into shrinkage by the second quarter.
The danger of stagnation rises
Jpmorgan said: “This effect alone may take the economy close to slippage to stagnation.” “This is before calculating the additional visits to the total exports and investment spending.”
The American economy was already weakening heading to the event last night, thanks to this in part to the specter of new definitions on global trade partners and the current fees that were placed on USMCA Allies Canada and Mexico, and 25 % duties plans for the auto sector and separate plans that are searched on conductors.
Related: There is no need for a commercial war; America has already won. Many.
Appreciation of GDP in Atlanta Virus GDP is estimated that the economy has reduced 3.7 % during the first quarter, which is an amazing transformation from the 2.4 % pace that it grew in the past three months of last year.
Even the amendment to a significant increase in gold imports, which led to the extraction of tracking accounts, indicates a 1.4 % shrinkage.
Adams said in Komerica: “The first -quarter growth image is very muddy. There was a major wound on the real GDP in the quarter of increased imports as companies in the introduction tariffs, which are partially corresponding to an inventory.”
He added, “separately from the commercial policy, the United States witnessed the great interim winds in January of urgent forest fires and winter storms across the south, and Dog reduced government expenditures.” “These cross -winding winds were likely to be the real GDP in the first quarter.”
The price of 1000 dollars
Economic expert on EYCARY of consumers argues that, along with the expected blow to the gross domestic product and enhancement of inflation pressure, the customs tariff is “an annual income loss of $ 690, while families at the bottom, the loss will exceed $ 1,000.”
“More importantly, we confirm that the important harmful financial market reaction would exacerbate these shocks and push the American economy to stagnate,” he added.
However, Samuel Thompses, the chief American economist in the macroeconomic economy in Pantheon, believes that the total impact of customs tariff changes depends on the level of price increase absorbed by retailers and consumer ability to shift to American -made products or those that are made by low countries.
Related: Goldman Sachs S&P 500, targeting GDP as a Trump tariff base
“We believe that these reduced factors help reduce the effect of any tariff on inflation by about a third,” he said. “This indicates a rise of 1.25 % to the primary PCE rate of the latest president’s plans.”
It also indicates that with the management of the date of the date of April 9, on the levels of the new tariff, “the door leaves open for rear tracking and more delay.”
“The speed through which the customs tariff can also enhance the issue to think that the slowdown, instead of stagnation, is waiting for us.”
It feeds in the link
However, the growth story is displayed, a combination of slowdown and fastest federal inflation is possible in an increasingly difficult place: decrease rates to support the labor market and risk an increase in inflation, or raising rates of taming price pressures and speeding risk.
More economic analysis:
- The price of gold hit the stumbling block. Where do you go from here?
- 7 fast food from the notes of the Federal Reserve Chairman Jerome Powell
- Retail sales add new complications to the expectations of reducing federal reserves
“The treasury revenues have decreased sharply, as investors fly and search for safe haven assets,” said Richard Carter, head of the London -based County Country Research.
‘This may indicate that the Federal Reserve will need to put additional price cuts on the table to search for the stagnation that is operated, but in the event that the high inflation is also facing, it is somewhat somewhere, “he added:” Any hint of the recession puts the soft decline that was achieved after a lot. “
