Analysts at Barclays Research express their view on the expected US move to roll back tariffs on Chinese goods and its impact on inflation and the yuan.
The effect on US inflation is “a drop in the bucket,” and would likely be immaterial for monetary policy deliberations.
A partial removal of tariffs may result in an even smaller drag on inflation, closer to a few-tenths.
For the Chinese currency, the potential improvement in US-China trade relations is also “not a yuan supercharger.”
If tariffs were removed on both sides, China’s current account surplus would gain by about $90 billion.
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