Trump threatens tariffs on all US$505 billion of Chinese imports

Ann Santiago
July 21, 2018

President Donald Trump said he's ready to hit all goods imported from China with tariffs, sending USA markets sliding before the opening bell.

Speaking with CNBC Friday morning, Trump said "I'm ready to go to 500", referring to the $505.5 billion in Chinese imports the USA took in previous year. Trump has also threatened further tariffs on $200 billion in Chinese goods.

Even while threatening China, Trump tried to reassure the Chinese government that he was not looking to "scare" the country. But his remarks to CNBC caught financial markets by surprise Friday.

The question is whether Trump's remarks mark the beginning of a new era of greater USA intervention, one in which the president and members of his cabinet feel free to weigh in on economic issues that were traditionally seen as outside the political domain.

Global markets have remained generally calm in recent weeks and months despite the eruption of a full-blown U.S.

The accusation follows months of escalating trade tensions between.

Earlier, Trump said he was willing to tax every product imported from China, sending USA markets sliding before the opening bell on Friday.

A second tranche of US$16 billion (RM65 billion) in products is under review and could soon be added to the U.S. measures. Beijing vowed "firm and forceful measures" in response.

Trump said he and Chinese President Xi Jinping maintain a good relationship despite the growing dispute over trade.

"I'm not doing this for politics, I'm doing this to do the right thing for our country", Trump said.

The U.S. dollar weakened on Friday against key world currencies as President Donald Trump complained again about its strength, while U.S. and European stock markets were tepid amid fresh tariff talk and another round of corporate earnings.

During his presidency, Richard Nixon had pressured the chairman of the Federal Reserve into keeping rates low, a fact revealed on the tapes he infamously used to record this and thousands of hours of other conversations.

Over the past three years, Beijing has gradually widened the narrow band in which the yuan is allowed to fluctuate, though regulators intervene regularly to guide its movement. It points out the potential consequences trade escalations could have on American soybean exports, underscoring that China is the world's largest soy importer.

Trump has ordered the Commerce Department to investigate whether auto imports pose a threat to USA national security that would justify tariffs or other trade restrictions. Earlier this year, he used national security as a justification for taxing imported steel and aluminum.

China imports just under $130 billion in US products each year, according to the Census Bureau, which would seemingly put that country at a disadvantage in the dispute.

"Automobiles - that's the 800-pound gorilla", Brookings' Dollar said. As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions, ' according to a statement from the White House following broadcast of the interview.

After the interview, Trump reiterated criticism of planned interest-rate hikes by the Federal Reserve, saying in a Twitter post that tightening policy would diminish any USA advantage in trade and exacerbate losses from "BAD trade deals". More than 70 per cent of Republican and Republican-leaning U.S. adults believe increased tariffs between the United States and its trading partners will be good for the country, according to a Pew Research Centre survey.

He said the Fed's course of tightening monetary policy "now hurts all that we have done".

Doing so slows growth, as it raises the cost of borrowing, but can also prevent the economy from overheating and tipping into recession.

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