Trump is threatening to put a tariff on every Chinese good

Remigio Civitarese
Luglio 22, 2018

Mr Trump complained that the United States was "being taken advantage of" on a number of fronts, including trade and monetary policy. The White House has also itemized $200 billion of additional Chinese imports that it said may be subject to tariffs.

The dollar index turned negative following the release of Trump's remarks, which were excerpted from a longer interview due to air Friday morning. USA stocks sank in early trading before rebounding.

Global markets have remained generally calm despite the eruption of a full-blown U.S.

The US-China spat is the largest and broadest of several trade fights picked by Trump.

"The dollar going down typically tends to lift equities and I think that is partly why we have seen a little bit of a turnaround today", Frederick said.

"They're picking the wrong customer, I'll tell you that - you know how intense he is on this issue", he said, adding: "Xi seems to think if he waits out the November elections, Trump will be weakened and therefore will lighten the bite".

The US also wants China to stop practices that allegedly encourage transfer of intellectual property - design and product ideas - to Chinese companies, such as requirements that foreign firms share ownership with local partners to access the Chinese market.

USA companies may find themselves less able to compete globally as import tariffs contribute to rising input costs, forcing them to raise prices or lower their profit margins.

Beijing is targeting, in particular, sectors like American agriculture that could harm Trump politically at home. "And that was the main way in which our economy recovered", Mr Stiglitz said in phone interview.

"I'm ready to go 500", the Republican leader told the USA network CNBC, referring to the US$505.5 billion (RM2.055 trillion) in Chinese imports accepted into the United States in 2017. "We've been ripped off by China for a long time".

The comments, plus Trump's criticism of Federal Reserve interest rate hikes, had sent the dollar tumbling against a basket of currencies. Earlier this year, he used national security as a justification for taxing imported steel and aluminum.

Trump has already imposed a 25 percent import tax on about $34 billion worth of Chinese tariffs.

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

St. Louis Federal Reserve Bank President James Bullard said on Friday the Federal Reserve would remain unaffected by Trump's comments on US monetary policy.

President Donald Trump inveighed against interest rate hikes for the second consecutive day, claiming that the rising dollar is 'taking away our big competitive edge'.

Trump added, referring to the Fed's rate increases: "The United States should not be penalized because we are doing so well". Tightening now hurts all that we have done.

America's central bank has twice increased benchmark lending rates this year, following three raises last year.

Most economists believe the Fed's current policy of raising interest rates is sound monetary policy given U.S. consumer price inflation is at an annual rate of 2.9% and the unemployment rate was at 4% in June. The Chinese government could also make it harder for USA companies to operate in China.

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