Boston College economics professor: The Fed should consider cutting interest rates to counter the negative impact of new tariffs

Odaily reported that Brian Bethune, an economics professor at Boston College, said that Trump's tariff policy is the biggest shock to the US economy since the Smoot-Hawley Tariff Act of 1930. Economists generally believe that the act, by stimulating the erection of trade barriers by various countries, exacerbated the Great Depression and led to a sharp decline in global economic activity. In response to the measures taken by the Trump administration, Canada has announced retaliatory tariffs, and Mexico has said it will unveil countermeasures on Sunday. Bethune warned that the new tariffs will disrupt supply chains and put US manufacturers with global operations in a difficult position. The direct impact of the new tariffs will be to curb growth and push up inflation, creating a "stagflation effect". The US experienced a period of stagflation in the 1970s and 1980s, when economic stagnation and high inflation coexisted. Bethune suggested that the Federal Reserve should consider cutting interest rates to address the current situation. (Jin Shi)