President Trump Eyes an Additional $500B Worth of Tariffs on Chinese Goods

Syndicate Post image

Donald Trump has attacked China the EU and America’s Federal Reserve

"China, the European Union and others have been manipulating their currencies and interest rates lower, while the USA is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge", Trump complained in one tweet.

Trump told CNBC, "I'm ready to go to 500", referring to the $505.5 billion in goods the US imports from China each year.

In the CNBC interview, Trump again claimed that the U.S. was "being taken advantage of" when it comes to trade policy.

The administration to date has slapped tariffs on $34 billion of Chinese goods in a trade dispute over what it calls the nation's predatory practices. Trump told CNBC he's anxious the Fed's policies will cancel out his efforts to boost the economy.

Trump also expressed concerns about how higher interest rates would impact record levels of USA federal debt, which has now exceeded $20 trillion.

The comments sent US markets sliding early Friday.

Trump authorized the tariffs after an investigation he ordered by the U.S. Trade Representative's office found that China was violating intellectual property rules and forcing American companies operating in China to hand over their technology secrets to gain access to the market.

The US, which is now doing well, should preserve its right to recover what was lost through such practices as illegal currency manipulation and trade deals that were not profitable for the US, the president tweeted.

When asked if the move might cause a stock market drop, he said: "Well, if it does, it does".

China has pledged to retaliate against United States tariffs in "equal scale and equal strength".

A second tranche of US$16 billion (RM65 billion) in products is under review and could soon be added to the United States measures.

Washington also is now targeting another $200 billion in imports which see fresh tariffs imposed as soon as September. Beijing vowed "firm and forceful measures" in response.

"I'm not thrilled", he said.

'I'm ready to go to 500, ' Trump said. "We have been ripped off by China for a long time", he said.

Additionally, Business Insider reports that "manufacturers from China's Jiangsu and Hebei provinces, who have reportedly produced hundreds of "Make America Great Again" hats, have said the cost of their product is likely to spike due to impending tariffs".

His comments did not help to push the dollar down versus the yuan, however.

On Friday, the yuan dipped to a 12-month low of 6.8 to the dollar, off by 7.6 percent since mid-February.

Instead, many analysts say they expect the Trump administration to impose more tariffs on China and potentially other key us trading partners.

China imports only $129.9 billion of U.S. goods, which leaves it little room for a tit-for-tat response.

"Automobiles - that's the 800-pound gorilla", Brookings' Dollar said.

St Louis Federal Reserve Bank's James Bullard said the Fed would remain unaffected by Mr Trump's comments on monetary policy and expressed concerns about rising tariffs.

Those and other Trump comments that criticised Federal Reserve interest rate hikes caused the dollar to fall back in the USA on Thursday. "Tightening now hurts all that we've done".

Latest News