Fed’s Williams: Both sides would lose in trade war

SAN FRANCISCO (Reuters) – Actions taken by the United States and China so far have fallen short of an actual trade war with damaging economic consequences, but if the conflict does escalate both sides have something to lose, a top Federal Reserve official said on Friday.

“Sometimes there will be an announcement that we are going to put in these tariffs and then there’s further consideration and negotiation and a shift in terms of how it is actually implemented,” San Francisco Fed President John Williams told reporters after a speech. “If it did get to the point where we are really seeing significant pullback from trade and openness of our economy, I think that would have pretty negative effects, both in terms of productivity and in terms of macroeconomic issues like inflation.”

(Reporting by Ann Saphir; Editing by Leslie Adler)