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US officials pointed to robust US jobs numbers published on Friday as a sign that the domestic economy could weather any short-term negative consequences of a trade war. They also continued to insist that Mr Trump was out to provoke US trading partners like China into negotiations to mend years of trade imbalances that have hurt American workers.
“There isn’t clear evidence in the data that the anxiety over trade is being harmful to the industries that we would most watch for harm in,” Kevin Hassett, the chairman of Mr Trump’s council of economic advisers, told Bloomberg Television. “If they were really concerned about it, we would have expected to see lay-offs.”
The US in June added 213,000 jobs, including 36,000 jobs in the manufacturing sector at the heart of Mr Trump’s trade efforts. It also saw 600,000 people rejoin the labour force.
But business groups in the US insist that they are already beginning to feel the pain of Mr Trump’s aggressive trade policies, which have been raising input costs for businesses and are likely to lead to lay-offs.
“We are not yet seeing the full impact. But it will come,” said Kip Eideberg, a spokesman for the Association of Equipment Manufacturers.
That view was backed up by the Federal Reserve which in the minutes of its June meeting expressed concern about the economic impact of Mr Trump’s trade policies and reported that businesses were telling it that tariffs were already causing them to put investments on hold or reduce them.