The CPI components suggest that inflation’s glide path through the “final mile” will remain sticky. Services less energy services rose 0.4% in January and are up 2.9% year-over-year. Shelter increased 0.2% on the month and 3.0% over the past year. Medical care services rose 0.3% in January and are up 3.9% year-over-year. These service categories continue to keep core inflation above the Fed’s target.

Progress is real. The chart below shows core CPI has finally taken an incremental step to a lower inflationary regime. Yet the path lower remains gradual and sticky.

The Tariff Effect on Core Goods

The CPI for commodities less food and energy commodities increased 1.1% year-over-year and remains a key contributor to overall disinflation. This category could contribute to even lower inflation this year if the U.S. avoids enacting new tariffs.

In Liberty Street Economics, the New York Federal Reserve published a quick study that demonstrates a tariff incidence of roughly “94 percent” in the first eight months of 2025 and “86 percent” by November, meaning the vast majority of tariff costs showed up in import prices paid by U.S. consumers. The average tariff rate rose to about 13 percent, and tariffed goods experienced price increases of roughly 11 percent relative to comparable untariffed goods. Fed Chair Jerome Powell noted at the January press conference on monetary policy that inflation could be closer to target absent tariff effects. This study provides supporting data.

However, from a policy of economic warfare, tariffs have likely achieved a primary aim: a significant reduction in imports from China. The study pointed out that “in the first eleven months of 2025, China’s share of U.S. imports fell by another 5 percentage points, slipping below 10 percent”. Chinese imports accounted for nearly 25% of U.S. imports in 2017 and declined to around 15% in 2024 following the tariff increases implemented in 2018 and 2019.

The inflationary consequences of tariffs could be secondary to this strategic goal. Importers have shifted supply chains to blunt the otherwise inflationary impact of the higher tariffs. The general disinflationary environment during the first round of tariffs also likely helped embolden today’s heightened tariff regimes.

The strategic objective may be clear. The inflationary implications are less so.

Are Tariffs an Enduring Inflationary Force?

The New York Fed study does not argue that tariffs create a self-sustaining inflation spiral. It documents substantial pass-through into prices during 2025. If no new tariffs are enacted, year-over-year comparisons will eventually absorb this price shock. Base effects alone would allow the tariff impulse to fade.

However, continued or expanded tariffs would introduce new price-level increases. Repeated rounds would transform a one-time adjustment into recurring upward pressure on core goods. Ongoing uncertainty around tariff policy remains a significant wildcard. Persistent uncertainty could encourage firms to raise prices preemptively in anticipation of future cost increases.

Reluctant Disinflation

Disinflation is underway, but the path for the final mile to 2% remains sticky. This phase can best be described as reluctant disinflation, the mirror image of sticky inflation.

The bond market remains broadly unconcerned about renewed inflationary pressure. Bond prices rose following the CPI release. After gaining 1.3% ahead of the report amid rising equity volatility, the iShares 20+ Year Treasury Bond ETF (TLT) added another 0.5% after the data. With TLT trading well above its upper Bollinger Band – a signal of short-term extension – I took profits on a large TLT position.

In recent weeks, I have shifted toward buying dips and selling rallies in TLT rather than fading strength. As long as the bond market remains confident that inflation will continue moderating, my inflation hedge remains concentrated in commodities as the U.S. in particular positions itself to run the economy hot with lower interest rates, high investment, and fiscal stimulus.

Be careful out there!

The post Core Inflation Softens, but the Final Mile to 2% Remains Sticky appeared first on Inflation Watch.

As before, Powell laid the blame for stagflationary impacts on tariffs: “increases in tariffs this year are likely to push up prices and weigh on economic activity.” In a likely reference to a Beige book full of tariff-driven warnings on inflation, Powell also observed the following:

“…we’re beginning to see some [tariff-driven inflationary] effects, and we do expect to see more of them over coming months. We do also see price increases in some of the relevant categories…that are attributable to tariff increases. In addition we look at surveys of businesses…many companies do expect to to put all or or some or all of the effective tariffs through to the next next person in the chain and ultimately to the consumer.”

These expectations for meaningful inflation keep the Fed sitting on its hands. The median expectation for the Federal Funds rate stayed the same for 2025 at 3.9% (the current range is 4.25 to 4.5%) but nudged higher for 2026 from 3.1% to 3.4%. Even 2027 nudged higher from 3.1% to 3.4%.

A Swipe at DOGE?

Powell’s implicit critique of Federal policies did not stop with economic policy this time around. In response to a question about the Federal Reserve’s plans to cut its workforce, Powell was curiously deliberate in explaining the “professional” way to rationalize a Federal workforce:

“This is something you do very carefully, thoughtfully, and you do it respecting that we have critical missions to carry out. I’ve had a lot of experience in my prior careers with headcount reductions and things like that, and this is how you do it professionally. You do it carefully, thoughtfully with a lot of planning, and you do it over a period of time.”

I took note of Powell’s commentary because the Department of Government Efficiency (DOGE) has made a name for itself with swift, sudden, and often deep cuts throughout the Federal government. Powell clearly plans to leave his Chairmanship swinging.

Muted Responses Include A Short-Term Bottom for the U.S. Dollar

While Powell was swinging, financial markets general yawned. The S&P 500 (SPY) did its typical post-Fed fade after erasing all of the morning’s gains. The net impact was a forgettable 0.03% loss on the day. The SPDR Gold Trust (GLD) fell 0.5% on the day as the U.S. dollar index (DXY) resumed its countertrend momentum since bottoming out at a fresh 3-year low and just below the April low. A major test is coming soon with resistance from the downtrending 50-day moving average (DMA) (the red line). I remain bearish on the U.S. dollar as long as that resistance holds.

Source: Tradingview.com

Be careful out there!

Full disclosure: long and short U.S. dollar currency pairs

The post Jerome Powell: Meaningful Inflation Is Coming appeared first on Inflation Watch.

(Source: Australian National Accounts: National Income, Expenditure and Product. Complete statistical tables available from the Australian Bureau of Statistics)

In cutting its cash rate for the second time during this easing cycle, Bullock called the move a “confident” cut. As the chart below demonstrates (Source: The Reserve Bank of Australia, Consumer Price Inflation – G1), Australia’s inflation has returned to pre-pandemic norms. Bullock described a broad-based slowing in price increases, leading to a forecast for “the underlying pulse of inflation around the midpoint of the 2 to 3 per cent range over the next year or so.” With that trend firmly in place, she concluded: “with inflation declining and the unemployment rate relatively low, we’re well positioned to deal with” the challenges presented by the U.S.’s trade war with the rest of the world.

(Full inflation data at Consumer Price Index, Australia)

Stable Inflation Enables Renewed Easing of Monetary Policy

The U.S.’s trade war threatens renewed inflation pressures through global supply chain disruptions. The RBA is monitoring these developments closely, forecasting “growth in our major trading partners slowing over the remainder of this year and next year.” At the same time, it has revised its domestic growth forecast expecting the economy to grow “a little more slowly,” and sees “global trade developments” as mostly deflationary—aside from inflationary supply shocks from the trade war. These factors underlie the RBA’s confidence in continuing the rate-cutting cycle.

The RBA has also been transparent about its easing bias. Bullock noted: “if we were just looking at where the domestic economy was at the moment, would we be looking at lowering rates or not, and as I said earlier with inflation in the band and also employment doing pretty well, we think there is a bit of scope to lower interest rates.” Even with labor market tightness, she added, “it does seem that inflation is continuing to come down notwithstanding a bit of tightness in the labour market.” Moreover, “inflation is right on target from a six-month annualised point of view.”

Looking ahead, the RBA sees conditional room for further easing: “I think if we continue to observe inflation coming down and staying down sustainably, then to the extent that we think there’s still restrictiveness in monetary policy—and we think there is a bit—then that would give us opportunities to lower the interest rate further.” However, Bullock acknowledged that renewed strength in consumer demand could change the equation: “If it looks like things pick up much more quickly than we thought they would… then all the cost pressures that the businesses are saying, well, they might be able to pass them on. That might be the risk on the upside, and the question there would be for us: are we still restrictive enough to keep that under control or do we need a bit more restrictiveness?”

Risks: A Fog of Unpredictability

Still, global and domestic risks remain. Bullock was frank about the external backdrop: “the situation we’re in is it’s not just uncertain, it’s actually unpredictable.” While the Federal Reserve has remained frozen—on high alert for stagflation—Australia is benefitting from a policy window (that may close in unpredictable ways).

Domestically, the RBA continues to monitor labor market imbalances. Bullock noted that “employment growth, the participation rate, vacancy rates, all these sorts of things are suggestive of the labour market still being quite tight.” On the other hand, consumption has not yet responded as expected to rising real incomes and falling rates: “We’ve been a little bit surprised that consumption hasn’t recovered as real incomes have started to recover. It’s just a bit softer than we thought it would be if you think about historical relationships. We thought it would have done better. So that’s the risk, that households for some reason are being much more cautious than they have been in the past and that that is a downside for the economy.”

The RBA has also shown intellectual flexibility in revisiting its assumptions: “we are open to the idea that we may be overestimating, or underestimating full employment, and I think that’s a healthy thing for us.”

Even amid these uncertainties, Australia’s anchored inflation and resilient labor conditions help reinforce the Australian dollar’s appeal as a mispriced asset in a volatile global landscape.

Trade Shocks: The Global Wildcard

Although Australia has a handle on its domestic picture, external shocks remain a major variable. Bullock acknowledged that the RBA, “just like everyone else, was completely blown out of the water by the scale and the scope” of the U.S.’s trade war. “So we really had to go back and have a much harder look. So there has been a lot of analysis done… and the Board does have to consider and factor much more of this into their thinking than was the case back before this all happened.”

While the RBA braces for future trade war storms, the U.S. Federal Reserve is in the center of the storm. The Fed is bracing for staglfationary impacts from the trade war and, as a result, remains stuck with inaction even as current inflation falls further from the Fed’s policy rate. Australia, by contrast, enjoys the flexibility of acting on current data and trends.

Conclusion: A Value Currency with Upside

Australia is entering a policy sweet spot: inflation is within target, the labor market remains robust, and GDP growth is beginning to recover. The country’s policy flexibility and economic trajectory stand in contrast to that of the U.S., where a hawkish Fed is constrained by future inflation expectations and geopolitical risk.

From a currency trading perspective, the Australian dollar looks as a value currency—undervalued after years of economic drag and monetary tightening…even with concerns about Chinese growth.

The following weekly chart of Invesco CurrencyShares Australian Dollar Trust (FXA) (currency pair AUD/USD) shows 14-year pressure on the Australian dollar versus the U.S. dollar. assuming the pandemic lows hold, the time looks ripe for a sustained turnaround.

Be careful out there!

Full disclosure: long AUD/USD, long AUD/JPY

The post Inflation at Target and GDP Growth Recovery: A Comeback Case for the Australian Dollar appeared first on Inflation Watch.

Source: April 2025 Manufacturing Business Outlook Survey, Federal Reserve Bank Philadelphia

At the same time economic activity fell off a cliff, prices paid accelerated higher. A steady uptrend in prices paid was in place since last year, but in April they jumped to levels last seen in July, 2022. After spiking in January, the prices received flattened out. So the good news, for now, is that firms in aggregate are not passing along the surge in prices paid. Either firms are facing the reality of a loss in pricing power in a softening economic environment, and/or they are trying to wait out the current economic chaos. Either way, the underlying stagflationary pressures are roiling just under the surface for the manufacturing sector.

Note that since these measures are diffusion indices (see definition in the above chart), the magnitude of these effects is not visible. Still, given policymakers closely watch these economic surveys to inform policy, the stagflationary signals are sure to bleed out into monetary policy.

The Fed Trap

Based on the speeches from members of the Federal Reserve, the stagflationary signals are already bleeding into monetary policy. For example, concerns about stagflation appeared in Fed Chair Jerome Powell’s answers to questions in an interview at the Economic Club of Chicago last week.

“the administration…is implementing significant policy changes and particularly trade now is the focus and the effects of that are likely to move us away from our goals. So unemployment is likely to go up as the economy slows in all likelihood and inflation is likely to go up as tariffs find their way and some part of those tariffs come to be paid by the public. So that’s the strong likelihood…”

This economic bind has the Fed trapped between inflation and economic weakness. For now, all the Fed can do is hope for the best. Hope as monetary policy came through as Powell continued: “…my hope is that we’ll get through this and get back…we’ll be moving away from those goals [of maximum employment and price stability] probably for the balance of this year and then or at least not making any progress and then we’ll resume that progress as we can.”

The Fed is clearly not thinking about responding to the current economic chaos with price cuts. Powell insisted that “our role is to make sure that this will be a one-time increase in prices and not something that turns into an ongoing inflation process.” The Fed cannot contain higher prices and higher inflation expectations with rate cuts. Thus, the Fed will likely sit on its hands as long as possible in the face of weakening employment. I expect the Fed to resort to creative “Fedspeak” in lieu of action in the hopes stagflationary pressures will wind down on their own.

A GTIP Dip

Three weeks ago I made the case for buying the Goldman Sachs Access Inflation Protected USD Bond ETF (GTIP) as one way of meeting the investing challenge of a stagflationary environment. GTIP fell soon after that as long-term bond yields suddenly soared with waning confidence in the U.S. economy and the U.S. dollar. I used this period to accumulate GTIP at lower prices since I do not foresee long-term yields going much higher absent an extreme crisis of confidence. GTIP will get its next big test when April’s CPI rolls out next month. Will it demonstrate businesses restraining from passing along tariffs to end consumers? Will it warn of resurgent inflationary pressures? The Federal Reserve Bank of Philadelphia’s April 2025 Manufacturing Business Outlook Survey suggests GTIP has tailwinds.

The Goldman Sachs Access Inflation Protected USD Bond ETF (GTIP) briefly dropped toward the bottom of its recent range.

Be careful out there!

Full disclosure: long GTIP

The post An Early Look At Stagflationary Pressures appeared first on Inflation Watch.

Shmid warned that “while in theory, tariffs may have only temporary effects on inflation (although persistent effects on the level of prices) I would be hesitant to take too much solace from theory in this environment”. He tied recent tariff announcements to broader signs of economic stress, including “a decline in consumer sentiment and increases in near-term inflation expectations.” Schmid acknowledged that the current policy environment has become “considerably more complicated,” citing feedback from business contacts who see growing risks on both sides of the Fed’s dual mandate of maximum employment and stable prices.

Schmid’s skepticism around transitory inflation contrasts with recent remarks from Fed Chair Jerome Powell, who has leaned into a more reassuring message about the persistence of tariff-driven price pressures. In “Jerome Powell’s Fed Deftly Maneuvers Through a Stagflationary Minefield“, I admired Powell’s effectiveness in navigating a difficult policy landscape, but I also pointed out the problematic use of “transitory” to describe inflationary effects. Powell argued that “it can be the case that it’s appropriate sometimes to look through inflation if it’s going to go away quickly without action by us… and that can be the case in the case of tariff inflation.”

That assertion paralleled Treasury Secretary Scott Bessent’s line that tariffs are a “one-time price adjustment.” But as I wrote in “The Sleight of Hand Behind the ‘One-Time Adjustment’ and ‘Transitory’ Tariff Inflation Narrative“, for inflation to be transitory, expectations for price levels would need to revert after the initial tariff shock. Yet, “tariffs make price reversion unlikely by locking in a permanently higher cost base.” In that piece, I also pointed out how structural effects – such as wage responses, supply chain disruptions, and embedded cost pass-through behavior – make inflationary pressures from tariffs more persistent. Outcomes are also hard to anticipate as inflationary pressures cascade through the economy.

Schmid appears attuned to these systemic effects. He described “a marked increase in the upside risks around inflation along with elevated downside risks to the outlook for employment and growth,” and openly questioned the prudence of discounting these risks as fleeting. Unlike Powell, who focused on optionality and emphasized that longer-term inflation expectations remain anchored, Schmid directly acknowledged that business sentiment and price expectations are shifting in ways that could prove difficult to reverse.

Powell’s message was strategically designed to preserve policy flexibility and calm markets in the face of stagflationary fears, and in that moment, Powell succeeded. However, I remain concerned that Powell’s framing underestimates the lasting damage that tariff-related cost increases can impose on the economy. As I wrote in my critique, the idea of a “one-time adjustment” may be statistically correct but economically misleading. A new, higher price level, once established, may not simply fade away. The higher price level could reshape business behavior and household expectations for years to come.

Schmid seems to understand these risks. His closing words underscore the seriousness of the moment (emphasis mine): “With renewed price pressures likely, I am not willing to take any chances when it comes to maintaining the Fed’s credibility on inflation.” That statement signals a shift away from the complacency that defines the transitory inflation narrative on tariffs.

The Last Friendly Report on Inflation?

As the Fed slowly accepts increased inflationary risks in the future, the past provides fleeting reasons for optimism on inflation. While I have stuck by the persistent and sticky narrative on inflation, March’s CPI (Consumer Price Index) report signaled the potential start of the next leg down for core inflation…just in time for tariffs to pressure inflation upward again. From the report:

“The index for all items less food and energy rose 0.1 percent in March, following a 0.2-percent increase in February. Indexes that increased over the month include personal care, medical care, education, apparel, and new vehicles. The indexes for airline fares, motor vehicle insurance, used cars and trucks, and recreation were among the major indexes that decreased in March…

The all items less food and energy index rose 2.8 percent over the last 12 months, the smallest
12-month increase since March 2021.”

Notably, the shelter index was up 4.0% year-over-year.

The chart below suggests that, absent tariff inflationary pressures, core CPI would finally be on its last leg lower toward the Fed’s 2.0% target.

Ironically, this positive development in core CPI could give more confidence to policymakers in pressing forward with inflationary tariffs.

Bostic Concurs

In an interview on Marketplace, president and CEO of the Federal Reserve Bank of Atlanta, Raphael Bostic, appeared to concur with Schmid’s concerns:

“I think the pressures that are out there are not the best for our mandates. All the models say that the introduction to tariffs is going to put upward pressure on prices, and I’ve seen more reports of recession fears in the media and from our business contacts than I’ve heard in a year and a half or two years. And so that’s also going to put pressure on our mandate, the employment mandate, in a way that is not positive.”

Bostic’s tiny source of solace is that “the current environment today might not be the current environment tomorrow.”

Currency Correction

Typically I conclude these inflation reviews by teasing out some implications and impacts in currency markets via the U.S. dollar. This time around, there are too many tariff-related cross-currents and too much economic chaos to directly connect dots. So, instead, I take this time to describe a “currency correction” I had to make on the Canadian dollar (USD/CAD) and the Mexican peso (USD/MXN).

A month ago I explained:

“I am short USD/MXN out of a belief that economic relations with Mexico are about as bad as they can get. I could of course get proven wrong in due time. On the other hand, I am long USD/CAD because I do not think the market fully appreciates how much weaker the Canadian economy will get as it tries to match the U.S. in this economic warfare.”

I was correct for almost two weeks, but in due time I have been proven wrong. I have now closed out both trades in order to reassess my next moves. Surprisingly, the Canadian dollar has proven quite strong against the Mexican peso. The exact opposite of my expectations. That chart below shows how CAD/MXN is breaking out from an approximate triangle or wedge type pattern.

Even more importantly, USD/CAD has broken below a key support level at the same time the U.S. dollar looks poised for a fresh, major breakout against the Mexican peso. In other words, in the last 2-3 weeks, I could not have been more wrong! (Note how the 25% tariff on Canada and Mexico defined a PEAK for USD/CAD, a classic contrarian move).

While USD/CAD broke support at its 200-day moving average (DMA) (the blue line), USD/MXN HELD 200DMA support. Thus, USD/MXN looks likelyly to head even higher while USD/CAD looks likely to head even lower.

This currency correction took me by surprise. The move likely reflects the effectiveness and the robustness of Canada’s current resistance to U.S. economic warfare. Mark Carney, the new Prime Minister of Canada, has been quite clear in laying out a framework of Canadian resistance. The Governor of the Bank of Canada, Tim Macklem, has been similarly forthright in laying out the implications for monetary policy and bracing Canadians for the economic warfare ahead. Apparently, both men have, so far, succeeded in bolstering Canada’s defenses (symbolically through the Canadian dollar). The implications for inflation both here and in Canada remain to be seen as trade slows down between the two North American neighbors and former allies.

Be careful out there!

Full disclosure: no positions

The post Inflation Concerns Rise at the Federal Reserve Amid Tariff Unease appeared first on Inflation Watch.

However, a systemic perspective greatly weakens claims of a one-time adjustment. Over time, tariffs can create a cascading effect through the economy, especially when tariffs are broadly applied across a wide swath of goods and services. Over time, tariffs can embed and entrench inflationary pressure in the economy from the following:

• Wage pressures – workers may demand higher wages to compensate for persistently higher consumer costs.
• Supply chain adjustments – companies may shift to more expensive domestic or alternative suppliers.
• Cost pass-through effects – producers adjusting pricing behavior in response to permanently higher costs as they enjoy greater pricing power amid a reduction in alternatives.

Moreover, successive rounds of tariffs, as the economy is experiencing now, amplify inflationary ripple effects, making them harder to unwind.

Still, that one-time adjustment is higher and persistent. So I am skeptical as Bessent also tries to resurrect “team transitory” when explaining the impact of tariffs. For inflation to be transitory, price levels would need to revert after the initial tariff shock. Tariffs make price reversion unlikely by locking in a permanently higher cost base unless offset by productivity gains, currency shifts, or supply chain innovations. Again, all else being equal, as long as the tariff is in place, someone is paying the cost, this year, the next year, and so on. The price increase will not disappear on its own accord. If you are still complaining about how much higher prices are now compared to 2019, you will find yourself complaining years out about the higher prices brought on by tariffs passed on to the consumer level.

Can pandemic-era inflation be described as a one-time adjustment? Of course. All we need to do is extend the time period over which “one-time” applies. The chart below shows the year-over-year change in the average annual CPI. Even if inflation slows to its pre-pandemic pace by 2026, the accumulated price increases remain, permanently raising the cost of living (of course, I have my doubts about the pace of inflation’s decline given the underlying stickiness of key inflationary components). In 2027, a casual observer could look back and conclude this inflationary era was a one-time price adjustment that lasted about 5 years. While the conclusion would be technically correct, the broad price level remains significantly elevated, straining household budgets long after the inflationary event passes. In other words, a “one-time adjustment” in this context is only academically meaningful.

Source: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average [CPILFESL], retrieved from FRED, Federal Reserve Bank of St. Louis; March 7, 2025.

Terms like “transitory” and “one-time adjustment” do not speak to the direct and real-time impacts on consumers. These terms are sleights of hand to convince financial markets to look through the price dynamics. Consumers cannot look through these impacts. They must immediately adjust spending habits to account for the deterioration in spending power from tariffs, especially broad based ones (all else being equal).

Adjustments and Transitory Effects In Currency Markets

In foreign exchange, the Canadian dollar and the Mexican peso have served as ground zero for the current chaos over ever-changing policies on tariffs and economic warfare. However, overall, against the U.S. dollar, these currencies have stuck to a well-defined trading range. Against the U.S. dollar, the peso was trading at these same levels four months ago with a 5% trading range from bottom to top (excluding outliers). Against the U.S. dollar, the Canadian dollar was trading at these same levels three months ago with a 2.6% trading range from bottom to top (excluding outliers). On the biggest single-day of volatility, the day tariffs were delayed for a month right before they were scheduled to take effect, USD/MXN traded through a 4.7% range and USD/CAD traded through a 2.8% range. In other words, both currencies covered their entire range of volatility in one day.

These percentages are large in foreign exchange. The adjustments can be seen in the persistently elevated levels for both USD/MXN and USD/CAD. There is no transitory observation until the volatility dies down and/or the price adjustment itself reverses. In the meantime, I am short USD/MXN out of a belief that economic relations with Mexico are about as bad as they can get. I could of course get proven wrong in due time. On the other hand, I am long USD/CAD because I do not think the market fully appreciates how much weaker the Canadian economy will get as it tries to match the U.S. in this economic warfare. Combined, these two trades are good pair trades where I collect interest income from USD/MXN as I wait. Week-to-week volatility in USD/CAD allows me to execute a few swing trades.

Epilogue

Last week I spent more time understanding the economic theories and frameworks espoused by Bessent. The interview at the Economic Club of New York with Larry Kudlow was educational in that respect. Unfortunately, the recording started after the commentary on tariffs. Minus the cheap shots, the rest of the interview is worth watching and understanding.

Be careful out there!

Full disclosure: long USD/CAD, short USD/MXN

The post The Sleight of Hand Behind the ‘One-Time Adjustment’ and ‘Transitory’ Tariff Inflation Narrative appeared first on Inflation Watch.

A truly fascinating tale of a completely avoidable bubble in the price of rice.

The post The Rice Panic of 2007 appeared first on Inflation Watch.

The U.S. imported $90.7M of steel grating in 2008. Alabama Metal Industries Corp (AL) and Fisher & Ludlow petitioned in this case.

Commerce reports the products covered under this preliminary finding as follows:

“…certain steel grating, consisting of two or more pieces of steel, including load-bearing pieces and cross pieces, joined by any assembly process, regardless of: (1) size or shape; (2) method of manufacture; (3) metallurgy (carbon, alloy, or stainless); (4) the profile of the bars; and (5) whether or not they are galvanized, painted, coated, clad or plated.”

The post U.S. Imposes Anti-Dumping Duties on Chinese Steel Grating appeared first on Inflation Watch.

The new dispute comes after  last month’s announcement by President Barack Obama of a 35% tariff on Chinese-made tires. That tariff has already led to increases in tire prices here.  China threatened to retaliate by imposing tariffs on American automotive products and chicken meat

The president of the United Steelworkers union said last month that it is interested in pursuing trade complaints in other sectors:

“We’re looking at what’s happening in paper sector, glass, cement, steel. That’s our obligation to our members,” said Leo Gerard, president of the 850,000-member United Steelworkers union that represents workers in numerous industries and brought the original case against Chinese tires.

Domestic political considerations apparently influenced the previous U.S. administration’s trade policies. It’s likely that such considerations will come into play once again. (Pennsylvania has 21 electoral votes.)

President Obama is scheduled to visit to China on November 15-18. Trade is expected to be a major topic of discussion.

The post U.S.-China trade tensions escalating; United Steelworkers eyeing paper, glass, cement imports. appeared first on Inflation Watch.