Arthur J. Villasanta – Fourth Estate Contributor
Washington, DC, United States (4E) – It’s always been somewhat easy to pinpoint which of the many challenges buffeting the U.S. is top of mind among the experts running the U.S. Federal Reserve.
Just count the number of times a word or words are mentioned in the Fed’s authoritative “Beige Book” report published eight times a year. This report is a summary of the state of U.S. business across the Fed’s 12 regional districts. It’s based on detailed information on economic conditions throughout the U.S. compiled by the Fed’s 12 regional banks and gleaned from interviews and data.
The July edition of the Beige Book is dominated by the words “tariff” or “tariffs” and anyone in the know can’t fail to understand why. Donald Trump’s protectionist trade war on the rest of the civilized world relies solely on tariffs as the punitive weapon of choice to square America’s skewed trade balance with some of its trading partners.
Respondents cited in the 32-page July “Beige Book described the ongoing trade war (some still refer to it as a trade spat) as triggering “panic buying” and a “rush to purchase metals,” among other unwholesome results.
The July Beige Book listed 31 instances of the words “tariff” or “tariffs.” Nearly all of the Fed’s 12 regional districts made reference to tariffs in their individual reports.
The words “tariff” or “tariffs” have now appeared 93 times in the Beige Book since Donald Trump became president in January 2017. Under his predecessor, Democrat Barack Obama, these words were only mentioned twice.
It should be noted that U.S. tariffs on steel and aluminum imposed on exports from Canada, Mexico and the European Union, among others, went into effect in March. These countries have since retaliated with tariffs of their own against the U.S.
In the April Beige Book, the words tariff and tariffs were mentioned 36 time even as U.S. companies were stunned by the effects of 25 percent duties on imported steel and aluminum announced in March. The May Beige Book included 22 references to tariffs.
In Beige Books over the preceding two decades, tariffs had been mentioned only 20 times. Before April, tariffs had not been mentioned more than twice in a single Beige Book going back to October 1996, the furthest back the Fed catalogs the full reports on its website.
Tariffs made 14 appearances in Beige Books issued during the presidency of George W. Bush. Bush imposed tariffs on imported steel in the spring of 2002 and lifted them at the end of 2003.
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