watch nowExtreme tariffs proposed by U.S. presidential candidate Donald Trump would interrupt the path of disinflation and could lead to higher interest rates, according to the head of the Institute of International Finance.
"The assumption is you'll have higher inflation, higher interest rates than you would have in the absence of those tariffs," Tim Adams, president and CEO of the IIF financial services industry trade group, told CNBC's Karen Tso on Tuesday.
Trump has made universal tariffs a core part of his economic pitch to voters, with suggestions of a 20% tariff on all goods from all countries and a higher 60% rate on Chinese imports.
Trump has previously described universal tariffs as drawing a "ring around the country," and denied they would be inflationary.
However, analysts have warned that the overall package proposed by Trump, including higher tariffs and curbs on immigration, would place upward pressure on inflation, even if some of the impact could be absorbed in the near-term.
Persons:
Donald Trump, Tim Adams, Karen Tso, Adams, Trump, John Micklethwait
Organizations:
U.S, Institute of International Finance, U.S ., Bloomberg, Trump, Federal Reserve
Locations:
United States