Adriana Kugler from Fed considers tariffs as threat for US economy despite easing relations with China

According to statements by Federal Reserve (Fed) official Adriana Kugler, US President Donald Trump's tariff policy will increase inflation and negatively affect the country's economic growth. It will happen despite the recent reduction of duties against China.

Earlier, the governments of the United States and The Middle Kingdom announced temporary duty reductions on goods from both countries and expressed a desire to work out a new trade agreement. The US plans to cut the tariffs on Chinese products to 30% from the previously established 145%, while China will reduce duties on US goods to 10% from the original 125%. In turn, Kugler noted that at the moment, the country's average tariff rates are still at a high level compared to past decades.

Last week, Fed officials left the central bank's benchmark interest rate unchanged for the third consecutive meeting. Kugler supported the decision, citing upward risks to inflation, and characterized the regulator's current position as “restrictive” for the country's economy.