Published: Sun, July 22, 2018
Finance | By Loren Pratt

Trump threatens tariffs on all $505bn of Chinese imports

Trump threatens tariffs on all $505bn of Chinese imports

He said: "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".

"I'm ready to go 500", the Republican leader told the us network CNBC, referring to the $505.5 billion in Chinese imports accepted into the U.S.in 2017.

"I'm not doing this for politics".

As the US-China trade war continues to undermine global economic confidence, Donald Trump sparked new fears among investors last night by threatening a currency war with Beijing. Last week, the White House announced a possible second tranche targeting up to $200 billion worth of goods.

When asked about the stock market possibly falling if the United States imposes duties on such a large amount of goods, Trump told CNBC: "If it does, it does". It has already slapped additional taxes on USA soy beans and pork exports - a move created to target Trump's rural voter base.

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

"I don't want them to be scared", he told CNBC.

The administration says it wants China to end the theft of intellectual property from USA companies and curb policies that require American and other foreign businesses to hand over technology in exchange for access to the Chinese market. President Xi Jingping "cannot lose face with his own people by giving in to the United States", Dollar said. "But it was very unfair".


In a pair of tweets, Trump said "China, the European Union and others have been manipulating their currencies. while the U.S.is raising rates while the dollar gets stronger and stronger with each passing day".

That is "taking away our big competitive edge". Given the strength of the USA economy, the Federal Reserve is expected to keep raising interest rates.

The chance inflation might accelerate has increased after the massive tax cut Mr. Trump championed, which has raised the USA debt and budget deficit.

He likewise also took aim at the dollar, saying a higher value "puts us at a disadvantage" and adding that the Chinese yuan "has been dropping like a rock". Analysts suggest Beijing is willing to let the yuan depreciate the longer the trade war rumbles on.

The yuan's depreciation stems from a confluence of factors including the trade war, expected slower Chinese economic growth, and speculation that Beijing will take stimulus steps as a buffer, which tends to pressure a nation's currency.

"The (yuan's) slide against the U.S. dollar will substantially cushion the impact on Chinese exporters from the planned next round of United States tariffs". The government does, however, enjoy more influence over the value of its currency than the USA does.

The comments came after the yuan plunged to its lowest level in a year, with little sign of China's central bank intervening to stem the slide. However, such a maneuver risks reigniting an outflow of capital that Beijing has spent months trying to halt.

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