Gopinath said the US tariffs raised inflation by “small amounts” but more substantially for household appliances, furniture, and coffee.
The US annual inflation rate accelerated to 2.9% in August, the highest since January, after holding at 2.7% in both June and July, in line with market expectations.
“Improve trade balance? No sign yet of that. Improve US manufacturing? No sign yet of that. Overall, the score card is negative,” the ex-IMF official said.
The US trade deficit ballooned 32.5% to $78.3 billion in July as record inflows of capital and other goods boosted imports. Inbound shipments soared 6% to $358.8 billion, as per a Reuters report.
Gita Gopinath currently serves as an economics professor at Harvard University in the US.
India has faced a 50% tariff on most of its exports to the US, half of which is a penalty for Indian purchases of Russian oil. Negotiations over a trade deal is yet to yield any agreement.
On the other hand, the Trump administration has entered into bilateral trade deals with Japan, South Korea, Vietnam, the European Union and the United Kingdom. A substantial pact with China is also under works.
