Powell: we don’t want tariffs and barriers to trade
HIGHER taxes on trade harm economic growth by damaging importers and exporters, Federal Reserve chairman Jerome Powell warned yesterday.
He did not criticise the president by name, but made clear Donald Trump’s headline policies run the risk of damaging growth if tariffs remain in place.
“In general, countries that remain open to trade, that have not erected barriers such as tariffs, have grown faster – [they have] higher income growth, higher productivity growth. Those which have gone in a protectionist direction have generally done worse,” he told senators.
“In principle open trading is good, we don’t want tariffs and barriers to trade … We want an international rules-based system, where countries get together and any country which violates it faces other countries.”
The outcome of a trade battle is unclear, he said: “The administration says it is going for broadly lower tariffs, that would be very good for the economy, not just ours but others. If we end up with higher tariffs, that is not good.”