SMM News: according to Bloomberg, Boston Fed Chairman Rosengren (Eric Rosengren) of 2019 FOMC said it was too early to assess the impact of escalating trade frictions.
He believes that the full impact will not appear until June 1, and it is not known whether a new agreement will be reached between now and the end of this month. But the senior Fed official also admitted that if the new tariffs continue, they could eventually drag down US economic growth and lead to higher inflation:
"this situation is likely to continue for some time, especially in the face of a tight labour market."
On the evening of Monday, May 13, Beijing time, the tariff Commission of the State Council issued a notice saying that on May 9, 2019, the United States Government announced that with effect from May 10, 2019, The tariff rate on $200 billion of listed goods imported from China has been raised from 10 per cent to 25 per cent. In order to defend the multilateral trading system and defend its legitimate rights and interests, China has to adjust and impose tariffs on some imports originating in the United States:
With effect from 0: 00 on June 1, 2019, tariffs have been imposed on some of the US goods on the $60 billion list, with tariffs of 25 per cent, 20 per cent or 10 per cent, respectively. A tariff of 5 per cent will continue to be imposed on goods subject to the previous 5 per cent tariff.
Fears of escalating trade frictions between the world's two largest economies have sparked turmoil in financial markets. Asian stocks, European stocks and US stocks fell across the board on Monday. In just one day, global stock markets lost more than $1 trillion in market value. Emerging market currencies also tumbled, with the Mingsheng emerging market currency index falling 0.7 per cent on Monday, its biggest one-day decline since October.
Xinhua News Agency previously quoted David French, senior vice president of the National Retail Federation, as saying that the sudden announcement of tariff increases by the US government would seriously disrupt the operation of US enterprises. In particular, small enterprises whose resources are limited make it difficult to ease the pressure on tariffs.
"tariffs are taxes paid by US companies and consumers, not by China," French stressed. " A recent study released by the Federal Reserve Bank of New York also showed that the US imposed tariffs on steel and aluminum products and Chinese goods last year, causing the US consumer price index to rise 0.3 percentage points last year.
Notably, the New York Fed's April consumer expectations survey released on Monday showed household inflation expectations were at a 20-month low since 2017, with US respondents sharply weaker inflation expectations in the short and medium term. Of these, one-year inflation expectations fell nearly 25 basis points from 2.82 per cent to 2.6 per cent, the third biggest drop since the survey was launched in mid-2013. Inflation expectations for the next three years have also fallen from 2.86 per cent to 2.69 per cent, meaning consumer inflation expectations have worsened in recent weeks.