US President Donald Trump on Friday said he was ready to slap punitive tariffs on all Chinese imports.
In an interview with US broadcaster CNBC, Trump also accused the European Union of currency manipulation and criticized the US Federal Reserve for it decision to continue raising interest rates.
On Chinese tariffs, Trump said he was “ready to go to 500,” referring to the roughly $505 billion (€431 billion) in Chinese goods imported to the US last year.
“I’m not doing this for politics, I’m doing this to do the right thing for our country,” the president said. “We have been ripped off by China for a long time.”
The White House has already imposed additional levies of up to 25 percent on $34 billion in Chinese products. Last week, the White House announced a possible second tranche targeting up to $200 billion worth of goods.
Beijing, meanwhile, has accused the United States of starting the “largest trade war in economic history” and has vowed to retaliate dollar-for-dollar. It has already slapped additional taxes on US soy beans and pork exports — a move designed to target Trump’s rural voter base.
In the CNBC interview, Trump again claimed that the US was “being taken advantage of” when it comes to trade policy.
“I don’t want (China) to be scared. I want them to do well,” he said. “I really like President Xi (Jinping) a lot. But it was very unfair.”
Trump slams Fed’s rate hikes
In a pair of tweets following the interview, Trump accused both China and the EU of manipulating their currencies to keep interest rates low. The dollar’s gains, meanwhile, were eroding “our competitive edge,” the president said, adding that the Federal Reserve’s decision to tighten monetary policy “now hurts all that we have done.”
America’s central bank has twice increased benchmark lending rates this year, following three raises last year. Two more rate hikes are still expected this year; Trump’s massive tax breaks have raised fears that they could accelerate inflation.
In the CNBC interview, Trump said the higher value of the dollar “puts us at a disadvantage” while the Chinese yuan “has been dropping like a rock.”
The comments sent the dollar tumbling late on Thursday, although by Friday it was the yuan’s turn to take a deep hit, trading at a one-year low of 6.7671 per dollar. Analysts suggest Beijing is willing to let the yuan depreciate the longer the trade war rumbles on.
“The (yuan’s) slide against the US dollar will substantially cushion the impact on Chinese exporters from the planned next round of US tariffs,” IHS Markit’s chief Asia economist Rajiv Biswas told AFP news agency.
Having boasted a $376 billion trade surplus with the US last year, Beijing is unable to match the US on tariffs. The government does, however, enjoy more influence over the value of its currency than the US does.
China’s central bank is already allowing the tightly controlled yuan to drift lower against the dollar in a bid to help Chinese exporters cope with Trump’s tariff hikes. However, such a maneuver risks reigniting an outflow of capital that Beijing has spent months trying to halt.
dm/tj (AP, Reuters, AFP)
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