Iran Press/ America: The US administration’s top economist, Tomas Philipson in a briefing with reporters about the CEA’s annual Economic Report of the President on Thursday 20th February said: “Once we got renegotiation of trade agreements, we saw uncertainty in the market, and investment took a hit."
Philipson said the CEA had only done internal estimates of the impact but referred journalists to a Federal Reserve study here that said trade uncertainty may have reduced growth in the US and world gross domestic products by as much as 1%.
Trump has blamed the Fed as the economy slowed from a 2.9% annualized growth rate in 2018 to 2.3% last year, and the central bank did trim rates three times to boost the economy.
But policymakers cited trade-related risks as a chief reason for the rate cuts. Philipson agreed with Trump that it was necessary to confront China on trade but said it did cause short-term disruption. The two countries have been in a trade war for much of 2018, shaking world financial markets as the flow of hundreds of billions of dollars worth of goods between the world’s two largest economies has been disrupted by tariffs.
“I don’t know if we fully agree on the quantitative point, but on the qualitative we certainly agree ... It is well known if we have uncertainty, investment takes a hit,” Philipson said.
Trade relations between the US and other trading sides worsened after Trump renewed tariffs and argued that bad trade deals have allowed other countries to take advantage of the United States, in an address that he described as "unfair trade practices", including the growing trade deficit and intellectual property theft. Since then the US has exchanged tariff measures several times, with China and other trading sides.
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