Trump Ready to Hit All Chinese Imports With Tariffs

Fredrick Soto
July 21, 2018

Mr Trump also suggested that higher interest rates left the United States at a disadvantage when compared to the European Union, China and Japan, allowing their currencies to weaken as the USA dollar strengthens.

During a CNBC interview on Friday, President Donald Trump has said that he's "not happy" with the Federal Reserve raising interest rates, and that he thinks doing so undermines any work he does for the economy.

But Trump - in a tit-for-tat tariff war with the EU, China, Mexico and Canada - said he was anxious that the timing put the USA at a "disadvantage" while the European Central Bank and the Bank of Japan maintain loose monetary policy, the network reported.

The first shots of the trade war were fired on July 6 when a 25 per cent tariff levied on US$34 billion worth of Chinese goods took effect, which prompted Beijing to react with tit-for-tat tariffs on American goods imported to China.

This was not the first time Trump departed from a long-standing practice by United States presidents of respecting the Federal Reserve's independence by refraining from commenting on interest rates or the value of the U.S. dollar, a custom he dismissed.

The view that China and the euro area are manipulating their currencies contradicts the Treasury's own currency report, which found in April that no major USA trade partner is gaming its exchange rate.

Around $505 billion of Chinese goods were imported to the U.S.in 2017, leading to a trade deficit of almost $376 billion, US government data shows.

"We've been ripped off by China for a long time", he added.

But most economists credit the Fed with engineering the economic recovery that began in 2010, and is now the second longest US economic expansion on record, by keeping interest rates at historically low levels and buying back US Treasury debt to inject liquidity into the market. "Were I Chairman Powell, I would ignore the president and do my job and I am confident he will do just that".

"I don't want them to be scared". 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.

The Fed has hiked interest rates twice this year and could jack the rate up twice more before year's end.

In an interview with CNBC, Trump said, "I'm willing to go to 500", referring to the $505.5 billion in goods imported from China in 2017.

When asked about the stock market possibly falling if the United States imposes such a large amount of duties, Trump said: "If it does, it does". "I want them to do well".

The comments raised the spectre of President Richard Nixon's pressure on the Fed in the 1970s, which led to economically damaging stagflation.

Trump said he is doing this in the national interest. Bloomberg's headline says Trump "trespass [ed] on Fed's independence". Powell has said the economy is strong enough for the Fed to keep raising rates gradually. "I may not look like much, but I'm very important", says the animated character in a video posted on Friday on the website of China Global Television Network (CGTN), the overseas news network of state-owned China Central Television.

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