US (R) Senator calls on Trump to rethink 60% tariff plan

Politics is going to be a can of worms over the next few months. Ugh.

Via Axios (a US political website):

• Sen. Steve Daines (R-Mont.) said Monday that the party should have more of a conversation about former President Trump’s plan for an aggressive tariff regime

Daines is referring to the already announced plan from Trump for an across-the-board 10% tariff on all imported goods, and a 60% levy on Chinese imports. This will, at the margin, push up prices for the US consumer.

In my sub-heading I refer to a US dollar devaluation policy. This has not been announced but it was only April when Trump’s running mate trumpeted the policy:

• Trump running mate Vance a supporter of US dollar devaluation – “make it easier to export”

Vance is correct on making exports more competitive. The flip side is it makes imports more expensive for consumers (again, at the margin).

If policies push inflation back up again the Federal Open Market Committee (FOMC) might have to respond by holding rates higher for longer or perhaps increasing. Who knows, but its something to consider.

Federal Reserve Chair Powell spoke on Monday, his latest views:

• More from Powell: We don’t want to be too risk averse
• Fed’s Powell: Economy performed really well over the last couple of years

This article was written by Eamonn Sheridan at www.forexlive.com.