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U.S. Likely to Reinforce Protective Trade.

Posted March. 25, 2002 09:49,   


Recently, uphill trends of U.S. economy are causing concern on side–effects like inflation and increase in trade deficit.

If trade deficit increases following increase in imports due to recovery of U.S market, it might form gloomy shadow in world economy through expansion of protectionism.

▽ Inflation, started = AP communication reported on 24th that signs of inflation are appearing as air fare, clothes prices and gasoline prices have been rising in high speed since last year.

Expenditure for clothes increased 4.5 percent, interest on Finance Ministry`s bond redeemable of duration 10 years rose from 4.8 percent few weeks ago to 5.4 percent, this week.

Loan interest of house security for 30 years expiration rose from 6.4 percent last year that was the lowest price in 30 years to 7.14 percent recently.

Shon Sung Won, senior economist in Wealth Paco Co. Ltd, warned saying,“ U.S. economy this year can be fatal by three factors such as sudden increase in demand, increase of energy and clothes”, reported AP .

Economic experts prospect that FRB decided to maintain 1.75 percent short term interest rates which was the lowest after 40 years, on 21st , however, it will raise interest around 0.25 percent in May, added AP.

▽Concern about increase in trade deficit =Financial times (FT) concerned on 24th reported about the increase in trade deficit following U.S. leading World Economy growth.

FT said that as U.S. imports big amount of EU or Japanese goods, the more each country`s economy recovers, the bigger trade deficit of U.S. would be.

FT estimated that trade deficit would cause degradation in the value of U.S. dollar and press U.S government.

Already, George.W.Bush administration started complaining to EU and Japan, “should we only take responsibility of world economy? ”

Paul Onil, Finance ministry has been criticizing Japan`s failure of economic reformation and Grand Aldonas, Vice- Minister of Commerce criticized recently, saying, “ what has EU done for World Economy growth? ”

The newspaper forecasted that U.S. government would reinforce protectionism policy following increase in trade deficit.

The newspaper warned, “ EU and other countries can suffer severely if they try to rely on the U.S. as `the last paradise of consumers”.