The average US household will be left $831 (£656) worse off as a result of the latest hikes in tariffs on Chinese goods in the nations’ trade war, according to economists.
The New York Federal Reserve released its calculation hours after president Donald Trump revealed a further $16bn (£12.6bn) aid package for US farmers hit by the conflict to date – with soybean and beef producers among those feeling the worst losses to date.
The sum was on top of $11bn (£8.7bn) in compensation agreed last year after the trade war escalated.
Earlier this month, the White House accused Beijing of reneging on earlier promises, scuppering hopes of a deal.
It immediately retaliated by imposing 25% tariffs on $250bn in Chinese imports – the charges rising from an earlier figure of 10%.
China responded by announcing increased tariffs on $60bn in US goods.
Economists at the New York Fed, part of the nation’s central banking system, wrote that the US increase meant that companies across America were more likely to source goods domestically to avoid rising costs.
But it declared those goods would still cost more than their pre-tariff Chinese alternatives.
“In sum, according to our estimates, these higher tariffs are likely to create large economic distortions and reduce US tariff revenues,” they said.
There is little sign of an end to the trade war in sight.
US agriculture secretary Sonny Perdue told reporters on Thursday it could take as long as July or August, when the government is expected to make its first new aid payments to farmers from the support programme.
Addressing reporters at the White House, Mr Trump said the US restrictions on Chinese telecoms firm Huawei – accused of being a threat to US national security – could become linked to any trade deal.
He said: “If we made a deal, I can imagine Huawei being included in some form of a trade deal.”
Asked specifically what that would look like, he replied, “It would look very good for us, I can tell you that.”
He described the firm as “very dangerous” – a charge denied by the company which denies its networks pose no spying threat as the US claims.
Source: SKY NEWS