As Inflation Fails to Take Off, White House Considers Protectionism
July 01, 2017
President Trump is being urged by his advisors, against the wishes of his cabinet, to increase tariffs to protect U.S. steel. This comes as inflation continues to stagnate.
- President Trump may impose significant tariffs on steel and other key imports. Under the guidance of four key advisors: Commerce Secretary Wilbur Ross, trade policy director Peter Navarro, senior advisor Stephen Miller, and chief strategist Steve Bannon, President Trump may pursue extreme tariffs against nations like China. The move would be seen as a win by the President’s key supporters, however, the majority of his Cabinet is opposed to the prospects. They and most major experts see the plan as inevitably leading to trade wars which could seriously damage the U.S. economy. [The Hill]
Economic Indicators & News
- Inflation eased for the third consecutive month and consumer spending was tepid in May, potential complications for the Federal Reserve as it charts a course for interest rates. The Fed’s preferred measure of inflation, the price index for personal consumption expenditures, rose 1.4% in May from a year earlier, the lowest level in six months, said the Commerce Department. Excluding the often-volatile categories of food and energy, so-called core prices were also up 1.4%, the lowest level since December 2015. [WSJ]