Washington: President Donald Trump said he was ready to impose tariffs on all $500 billion of imported goods from China, remarks that sent the US stock market and dollar retreating and threatened to escalate a trade clash with the Asian giant.
“We’re down a tremendous amount,” Trump said in an interview about trade imbalances with China on CNBC broadcast on Friday. “I’m ready to go to 500.”
His remarks worried investors already grappling with the impact of a strengthening dollar on corporate results, and key stock indexes on Wall Street dropped at the open on Friday. Around $505 billion of Chinese goods came into the United States in 2017, leading to a trade deficit of nearly $376 billion, US government data shows.
The magnitude of the imbalance has continued into 2018, with Chinese imports totaling $205 billion in the first five months of the year and the deficit reaching $152 billion. Trump is taking a more aggressive, protectionist posture on trade, sparking retaliatory measures from countries around the world and igniting disputes on multiple fronts.
Earlier this month, US imposed tariffs on $34 billion of Chinese imports and China promptly levied taxes on the same value of US products.
Trump attacks EU for fining Google
- US President Trump attacked the European Union (EU), saying Europe’s latest fining of US tech-giant Google showed that the bloc ‘truly’ has ‘taken advantage of the US’.
- “The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google,” Trump tweeted.
- “They truly have taken advantage of the US, but not for long!”
- “I told you so!” he added, referring to his earlier harsh remarks toward Brussels over trade deficit and defence spending sharing, Xinhua reported.
- $5 bn The European Commission said on Wednesday that it is set to fine Google 4.3 billion euros (around $5 billion) for monopoly with its Android operating system, accusing it of violating the EU competition rules.
- Google CEO Sundar Pichai later challenged the fine. Trump’s remarks came before the scheduled visit of EU Commission prez Jean-Claude Juncker
- The White House said Trump and Juncker will focus on improving transatlantic trade and forging a stronger economic partnership.
- However, Juncker, for his part, told a news conference on the same day that the European Union would not be intimidated on trade war.
China’s policy debate deepens
- A policy debate in China on how best to address slowing growth deepened on Friday, as analysts urged authorities to boost fiscal stimulus amid rising risks to the world’s second-biggest economy from a bitter trade conflict with the United States.
- An article in Financial News, which is run by the People’s Bank of China (PBOC), quoted analysts as calling for an adjustment to fiscal policy and some loosening of financial regulations, saying monetary policy would not be able to resolve corporate funding challenges on its own.
- The article cited CITIC Securities fixed-income analyst Ming Ming as saying that maximizing effectiveness of monetary policy requires active coordination with fiscal and regulatory policies.
- As China’s economic growth slows, it has sparked a debate among government researchers on whether fiscal policy should help to soften the impact of a trade war with the United States. Both countries have already slapped tit-for-tat tariffs on each other’s goods and with no signs of easing in tensions Beijing has already started to loosen monetary conditions.