U.S. Economy Stays Strong Enough Despite Global Trade War

(The Post News)- New York Times economic reporters Colby Smith and Tony Room say the United States of America’s (US) economy has remained strong despite the global trade war. They say the U.S. president Donald Trump is less likely to withdraw from his global trade ambitions, as inflation is low, unemployment remains steady, and U.S. stock markets have returned to all-time highs.

Although Smith and Tony highlight the strength of the U.S. economy, they believe the increase in trade tariffs might pose a threat to the U.S. economy. Thy referred to the 30% increase in tariffs on the European Union, which they believe might be challenging for the U.S. economy.

Eric Winograd, an economist at the investment firm AllianceBernstein, says if the tariffs on imported goods remain higher, that will cause “stagflation”. Meanwhile, U.S. inflation had risen in June, reaching its highest point in four months, as price increases partly driven by tariffs had a stronger impact.

Tuesday, 15 July, the Bureau of Labour Statistics revealed that consumer prices went up by 0.3% last month, which had shown a 2.7% increase in the inflation rate. This increase can be seen as the highest since February.

The date which was released on Tuesday corresponds to what the economists were expecting. They had predicted a rise in the Consumer Price Index (CPI), particularly in June compared to May.

Amongst other things, the increase in gas prices played a role in the overall CPI Economists also thought that more businesses would pass along higher import costs to shoppers due to tariffs.
Heather Long, chief economist at Navy Federal Credit Union says tariffs are beginning to have an impact. Long says it wasn’t as bad as it could have been, but the data shows the effects.

When gas and food prices (which often change a lot) are removed, the “core” CPI still rose 0.2% from May and 2.9% over the past year, slightly higher than last month’s increases of 0.1% and 2.8%.

Since February this year, bellow are the tariffs that had been the U.S.

Australia 10%
Bangladesh 10%
Cambodia 10%
Canada 25%
China 10%
European Union 10%
India 10%
Indonesia 10%
Israel 10%
Japan 10%
Mexico 25%
Pakistan 10%
South Korea 10%
Switzerland 10%
Taiwan 10%
Thailand 10%
United Kingdom 10%
Vietnam 10%