Barclays pointed out that even with the partial withdrawal of additional tariffs on China, the impact on US inflation and the yuan would not be significant.
Analysts such as Jayati Baladwaji said in a report that even if the additional tariffs were completely lifted, the direct impact on US inflation would be at most one-time 0.3 points. He mentioned that the proportion of Chinese products in total rice consumption is relatively low as the reason for the small change.
He said the impact on US inflation would be “burnt water” and predicted that it would likely be less important to monetary policy talks. In the case of a partial withdrawal, the impact on inflation is expected to be even smaller.
Regarding the renminbi, it is analyzed that the improvement of US-China trade relations will not be the “former supercharger”. If additional tariffs are lifted in both the US and China, China’s current account surplus is expected to grow by an estimated $ 90 billion, suggesting a 1.8% rise in the yuan. However, he pointed out that the actual impact would be smaller, as tariff removal would be gradual or limited in scope.
Original title:
news-rsf-original-reference paywall">Barclays Sees Mild Impact on US Inflation, Yuan from Tariff Move(excerpt)
