The brewing transatlantic trade war could result in fewer US imports and exports and do little to redress the trade deficit President Donald Trump has railed against in recent months, according to research from the Federal Reserve Bank of New York.
The tariffs imposed by Mr Trump on a wide range of imports from the EU and China are likely to push up costs for US companies and make US products less competitive, according to analysis from Mary Amiti, assistant vice-president in the Federal Reserve Bank of New York’s Research and Statistics Group.
US exports are likely to fall “not only because of other countries’ retaliatory tariffs on US exports, but also because the costs for US firms producing goods for export will rise and make US exports less competitive on the world market,” the analysis said.