Trump Tweets 'Tariffs Are Working,' Can Pay Down Debt

Daniel Fowler
August 8, 2018

China's new threat targeting a smaller amount of USA goods reflects the fact that Beijing is running out of products for retaliation due to its lopsided trade balance with the United States.

The two countries have already imposed £26bn ($34bn) worth of tariffs on each others' goods as the trade war ramped up in July. Growth in factory output has begun slowing across advanced economies, while business leaders fear further escalation.

Chinese state media on Monday lambasted US President Donald Trump's trade policies in an unusually personal attack, seeking to reassure investors who are anxious about China's economy with growth concerns shaking its financial markets.

There will be "others who will be offering barrels to China, so it could find itself able to replace lost volumes from the U.S.", Atkinson said. The move was meant to bring China back to the negotiating table for talks over USA demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit, but China's response suggests the move had failed.

But as is common with his Twitter posts, some of his claims were either unproven or incorrect.

The criticism is coming after an order made by the United States to reduce oil imports from Iran was rejected by China.

Economists have warned that the tit-for-tat import duties, which have unsettled the USA stock market, could undercut manufacturing through disruptions to the supply chain and put a brake on the strong economic growth.

"Tariffs will make our country much richer than it is today", Trump said in another tweet.

"Tariffs have had a tremendous positive impact on our Steel Industry", he tweeted.

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He predicted that the USA market will "go up dramatically" after the "horrible Trade Deals" are successfully renegotiated. "We win either way".

There are also signs the Trump administration is trying to revive formal negotiations with Beijing. That covers more than two-thirds of the value of China's imports from the USA, but it excludes products such as big aeroplanes and some computer chips, which China struggles to produce domestically. From Apple to General Motors, a long list of large USA enterprises have transferred extensive operations to China and could be vulnerable to any response from Beijing.

This could drive US importers to stop bringing in certain goods because they are too costly, hurting the foreign manufacturers, but those foreign companies do not pay the tariffs, and neither do the foreign countries where those companies are based.

The trade friction between China and the U.S.is growing bitter.

The dispute is part of broader US complaints about global trading conditions that have prompted Trump to raise duties on steel, aluminum, washing machines or solar panels from Canada, Europe, Japan and South Korea.

Talks with China and Canada, however, have remained very frosty, and Trump has promised to punish both economies if he doesn't get his way.

Donald Trump, right, listens to Larry Kudlow, his chief economic adviser, on the lawn of the White House in July.

Representatives for the White House and the US Commerce Department did not immediately reply to a request for comment on China's retaliatory move.

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