US Fed Chief Warns Of Lasting Economic Damage, Rising Prices & Job Risks Due To Trade War Policies | image-ai |
US Federal Reserve Chair Jerome Powell has raised major concerns about the impact of former President Donald Trump’s tariffs, warning they could push up inflation and hurt the US economy in the long run.
Speaking in Chicago on Wednesday, Powell said the scale of the tariffs is far beyond what was expected. He stressed that the uncertainty around trade policy is troubling. “These are very fundamental policy changes,” Powell said. “There isn’t a modern experience of how to think about this.”
Inflation and Jobs at Risk
The Federal Reserve’s main job is to support full employment and keep inflation under control. But Powell warned that Trump’s trade war could threaten both. While the economy is still doing okay, he said prices could rise as companies pass on the cost of tariffs to consumers.
He also highlighted the recent market volatility caused by the trade dispute. “This is a time of high uncertainty,” he said.
Wall Street Reacts with Sharp Falls
The effects of the trade war were clearly seen on Wall Street. The Nasdaq dropped over 4%, the S&P fell more than 3%, and the Dow Jones slipped over 2%. Chipmaker Nvidia fell more than 10% after reporting losses from new US export restrictions on semiconductors tied to the US-China trade clash.
Trump Still Optimistic on Trade Deals
Despite the market troubles, Donald Trump appeared upbeat. He claimed “Big Progress!” in trade talks with Japan. His strategy is to use tariffs to push countries into signing separate deals that would benefit American manufacturers and workers.
China Hits Back Hard
China, however, remains firm. While most countries face 10% tariffs, Chinese products are hit with tariffs up to 145%. In return, China imposed duties of 125% on US goods.
Chinese Foreign Ministry spokesman Lin Jian warned the US to stop using threats. “There is no winner in a tariff war or a trade war,” he said. “China does not want to fight, but it is not afraid to fight.”
China Reports Growth Amid Tensions
Despite the tensions, China reported a 5.4% jump in growth in the first quarter. Experts believe exporters rushed to ship goods before new US tariffs took effect, temporarily boosting numbers.
