SINTRA, Portugal -- An array of concerns were raised by Japanese, U.S. and European central bank chiefs on Wednesday over the negative impact of global trade friction triggered by import restrictions imposed by the administration of U.S. President Donald Trump.
They discussed their views during the European Central Bank's annual forum, held in Sintra, Portugal.
"It's not easy and it's not yet time to see what the consequences on monetary policy [of the trade frictions can be]," ECB President Mario Draghi said. "There's no ground to be optimistic on that."
The European Union has decided to impose retaliatory tariffs on some U.S. goods from Friday, in response to the U.S. decision earlier this month to add the EU to the list of countries and regions subject to its import restrictions on steel and aluminium.
Shrinking EU-U.S. trade would throw cold water on the moderate economic recovery in European countries and also could adversely affect the ECB's efforts to normalize monetary policy.
"We are hearing about [U.S. companies'] decisions to postpone investment, postpone hiring," U.S. Federal Reserve Board Chairman Jerome Powell said.
Given that the U.S. economy has been firm, the Fed has raised interest rates to prevent the economy from overheating. Yet Powell said,"Changes in trade policy could cause us to have to question the outlook."
Bank of Japan Gov. Haruhiko Kuroda expressed concern over the aggravation of trade friction between the United States and China. "The indirect impact on the Japanese economy could be quite significant ... if this escalation of tariffs between the U.S. and China continues," he said.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
