Donald Trump imposing massive US tariffs on Chinese imports could drag down global inflation by lowering the price of goods in other countries, a senior Bank of England policymaker has said.
Swati Dhingra, an external member of the Bank’s rate-setting monetary policy committee, said Trump imposing a threatened 60% tariff on goods from China sold in the US could lead Chinese exporters to cut their prices elsewhere to ensure they maintained current trade volumes.
“If there is the kind of big 60% type of tariff increase that’s been proposed, that will have repercussions on to world prices, and mostly on the downward direction,” she said.
Speaking at a conference in London on Monday, the economist said there was heightened uncertainty about what policies the president-elect would carry through from the campaign trail. Trump warned before this month’s election that he would slap tariffs of up to 60% on China and up to 20% on other US trade partners.
However, Dhingra said the “textbook” impact of the world’s largest goods importer imposing such a large tariff on products…
