Trump threatens tariffs on all $505 billion of Chinese imports

China has accused the US of starting the ‘largest trade war in economic history.’ (AFP)
Updated 20 July 2018
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Trump threatens tariffs on all $505 billion of Chinese imports

  • Trump says he is willing to hit all Chinese goods imported to the US with tariffs if necessary
  • China accuses the US of starting the ‘largest trade war in economic history’

WASHINGTON: US President Donald Trump on Friday said he was ready to impose tariffs on all $500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.
“We’re down a tremendous amount,” Trump said in an interview about trade imbalances with China on CNBC television broadcast on Friday. “I’m ready to go to 500.”
His comments worried investors already grappling with the impact of a strengthening US dollar on corporate results, and key stock indexes on Wall Street dropped at the open on Friday.
The US dollar fell against major currencies on Friday on Trumps threat to impose more import tariffs and his repetition of complaints about rising interest rates and the strength of the US dollar.
The dollar index, a measure of its value against a basket of six major currencies, was on track to post its largest one-day loss in three weeks. Against the yen, the dollar was on pace for its worst daily fall in two months.
A top Federal Reserve official, meanwhile, warned the trade war could hurt the US economy.
Around $505 billion of Chinese goods were imported to the US in 2017, leading to a trade deficit of nearly $376 billion, US government data shows. Chinese imports from the US totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion.
Trump is taking a more aggressive, protectionist posture on trade than his recent predecessors, sparking retaliatory measures from other countries. Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. China promptly levied taxes on the same value of US products.
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. Look, I’m not doing this for politics.”
Still, new tariffs could help Trump’s Republican party going into November’s congressional elections. More than 70 percent of Republican and Republican-leaning US adults believe increased tariffs between the United States and its trading partners will be good for the country, according to a Pew Research Center survey released late Thursday.
However, most economists warn that the imposition of import tariffs could disrupt global manufacturing supply chains, raise input costs and raise prices for consumers, leading to slower economic growth.
After the interview, Trump reiterated criticism of the Federal Reserve’s planned interest-rate hikes, posting on Twitter that the tightening policy would diminish any US trade advantage and exacerbate losses from “BAD trade deals.”
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.
“The escalating trade war, if it goes badly, could be a risk for the US economy,” Bullard said, adding he understands the policy’s objective. “But it could be that all we end up with is a lot of tariffs globally and a lot of other types of protectionism globally.”


Germany: US calling European cars a threat is ‘frightening’

Updated 16 February 2019
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Germany: US calling European cars a threat is ‘frightening’

  • ‘If these cars ... suddenly spell a threat to US national security, then that is frightening to us’

MUNICH, Germany: German Chancellor Angela Merkel on Saturday labelled as “frightening” tough US trade rhetoric planning to declare European car imports a national security threat.

“If these cars... suddenly spell a threat to US national security, then that is frightening to us,” she said.

Merkel pointed out that the biggest car plant of German luxury brand BMW was not in Bavaria but in South Carolina, from where it exports vehicles to China.

“All I can say is it would be good if we could resume proper talks with one another,” she said at the Munich Security Conference.

“Then we will find a solution.”

A US Commerce Department report has concluded that auto imports threaten national security, setting the stage for possible tariffs by the White House, two people familiar with the matter said Thursday.

The investigation, ordered by President Donald Trump in May, is “positive” with respect to the central question of whether the imports “impair” US national security, said a European auto industry source.

“It’s going to say that auto imports are a threat to national security,” said an official with another auto company.

The report, which is expected to be delivered to the White House by a Sunday deadline, has been seen as a major risk for foreign automakers.

Trump has threatened to slap 25 percent duties on European autos, especially targeting Germany, which he says has harmed the American car industry.

After receiving the report, the US president will have 90 days to decide whether to move ahead with tariffs.

Trump in July reached a trade truce with European Commission President Jean-Claude Juncker, with the two pledging no new tariffs while the negotiations continued.

Brussels has already drawn up a list of €20 billion ($22.6 billion) in US exports for retaliatory tariffs should Washington press ahead, the commission’s Director-General for Trade Jean-Luc Demarty told the European Parliament last month.

The White House has used the national security argument — saying that undermining the American manufacturing base impairs military readiness, among other claims — to impose steep tariffs on steel and aluminum imports, drawing instant retaliation from the EU, Canada, Mexico and China.

Trading partners have sometimes reacted with outrage at the suggestion their exports posed a threat to US national security.