Read previewUS efforts to counterbalance Chinese imports could instead create unsteadiness in the country's fight against inflation, S&P Global Intelligence wrote.
Advertisement"Yet economists say the new duties, and tariffs more broadly, may carry an unwelcome consequence: higher prices and a heightened probability of higher-for-longer interest rates," S&P wrote.
Of the 14 categories under scrutiny, the top five accounted for just 3% of Chinese imports into the US in 2022, S&P cited.
But for domestic manufacturers, tariffs can ease the pressure to lower prices, as Chinese competitors lose their low-cost advantage.
In this sense, protectionism can boost economic growth in the long run, but not before fueling market inefficiencies and complicating inflation.
Persons:
—, Donald Trump, hasn't shied, Biden, he's, Ben Herzon
Organizations:
Service, P Global Intelligence, Federal Reserve, Business, P's
Locations:
China