IMF experts: US tariffs unlikely to resolve trade imbalances

CNC
Added On August 24, 2019

The International Monetary Fund (IMF) has warned that American importers and consumers are footing the bill for the U.S. administration's tariffs imposed on Chinese goods, and that the levies won't resolve the trade imbalance between the two economies.
 
In an IMF blog post titled "Taming the Currency Hype," co-authors argued that imposing tariffs is a counterproductive policy to tackle currency overvaluation because "tariffs and exchange rates work differently."
 
The economists said the depreciation of China's currency, the renminbi, is largely " a result of these trade actions and associated uncertainties."
 
The authors say "Higher bilateral tariffs are unlikely to reduce aggregate trade imbalances, as they mainly divert trade to other countries." 上板   
 
Trump has repeatedly lashed out at the Federal Reserve, scolding it for not having cut the benchmark interest rate enough, while expressing the frustration that a strong dollar leaves the U.S. economy in a disadvantageous position vis-a-vis other economies in the world.
 
The IMF blog post pointed out that "one should not put too much stock in the view that easing monetary policy can weaken a country's currency enough to bring a lasting improvement in its trade balance."
 
The economists said countries that run trade deficits such as the United States, "should reduce budget deficits without sacrificing growth and strengthen the competitiveness of their export industries."