Barclays analysts, including Jayati Bharadwaj, pointed out that the maximum direct impact on inflation in the United States of America would be a one-time reduction of 0.3 percentage points if full import tariffs on Chinese goods were eliminated.
In a note, they cited the relatively small share of Chinese imports in the US consumer basket as the reason for this slight change. They explained that the effect of this on the inflation rate in the United States is like a “point in the sea” and that it cannot be a minor factor in the discussion of monetary policy, and that a partial cut in fees could lead to a much smaller impact on the inflation rate approaching to a few tenths of a percentage point.
On the Chinese currency, analysts said the possibility of improved trade relations between the United States and China is also not a “super-motor force for the yuan”, believing that China’s current account surplus would increase by about $90 billion if tariffs are removed from both sides. , leading to a 1.8% increase in the value of the yuan, but the actual effect may be smaller as any possible removal of fees could be phased in; Or limited to only a group of Chinese goods.
Source: El Iktisad
