Trump ready to hit all Chinese imports with tariffs

Daniel Fowler
July 20, 2018

China has retaliated with duties of its own, hitting USA imports of soybeans and pork.

Global markets are falling late on Friday morning after US President Donald Trump threatened to levy new tariffs on more than $500 billion of goods from China. "We have been ripped off by China for a long time". "As usual, not a level playing field", Mr Trump said.

Mr Trump's comments come before the most recent round of USA tariffs has had time to take effect.

"I don't like all of this work that we're putting into the economy and then I see rates going up", he said.

He added, "No one in the administration has said anything to me that really gives me concern on this front".

The rhetoric marks ramps up the U.S-China trade war another step, though each country has issued just $34 billion in tariffs so far.

"I'm not thrilled", he told CNBC's Joe Kernen.

The Fed has raised rates five times since Trump took office in January 2017, and has penciled in two more hikes for this year. Erdogan has clashed with his central bank, asserting his notion that higher interest rates feed inflation rather than restraining price rises.

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Feroli also noted that the easiest way for Trump to bend the Fed to his political will would be to fill the Federal Reserve Board of Governors with members that agreed with a low interest rate policy or were personally connected to the president.

U.S. companies may find themselves less able to compete globally as import tariffs contribute to rising input costs, forcing them to raise prices or lower their profit margins.

Dow futures which had already been pointing modestly lower slid sharply after the comments were aired by CNBC early Friday, indicating triple-digit losses when the market opens.

In the meantime, currency traders may need to pay closer attention to the president's Twitter feed. He also called Jerome Powell, whom Trump nominated to lead the Fed, a "very good man".

Since the Clinton administration, the nation's chief executives have declined to comment on Fed actions, out of respect for the independence of the institution, and to avoid any hint of political influence over the nation's money supply. But while the Federal Reserve's current benchmark rate is less than half of China's, the Fed is in the middle of steadily ratcheting its lending rate higher.

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

The comment breaks with a long-standing tradition of USA presidents not commenting on central-bank policy. But JPMorgan economist Michael Feroli advanced an interesting alternate theory: Trump's comments may inspire the Fed to go the other direction. China imports only $129.9 billion of United States goods, which leaves it little room for a tit-for-tat response. The Fed has been carefully and gradually raising rates over the past several years to keep inflation in check and to prevent the economy from overheating.

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