WASHINGTON: President Donald Trump launched a fresh attack on American trading partners, saying the European Union (EU) and China were manipulating their currencies, and he threatened to hit all imports from China with high tariffs.
The comments also signaled an undiminished appetite for battle on multiple fronts after a week dominated by coverage of the fallout from his dealings with Russian President Vladimir Putin.
The harsh comments took fresh aim at pillars of the international economic system and underscored Trump’s break with long-established norms by again openly rebuking the Federal Reserve for raising interest rates.
The outbursts were another crosswind for Wall Street, which struggled to find direction and finished the day a hair’s breadth in negative territory.
In a pair of tweets, Trump said China, the European Union and others had been “manipulating their currencies and interest rates lower” while the US dollar strengthened, eroding “our big competitive edge.”
He said the Fed’s course of tightening monetary policy now “hurts all that we have done.”
The Fed has raised the benchmark lending rate twice this year after three increases in 2017 and two more rate hikes are expected this year as the central bank removes stimulus from the economy to keep a lid on inflation.
The chance inflation might accelerate has increased after the massive tax cut Trump championed last year, which has raised the US debt and budget deficit.
He again said he was willing to ramp up his attacks on China, potentially imposing punitive tariffs on all of the $505.6 billion in goods imported from that nation.
“I’m ready to go to 500,” Trump said in a CNBC interview . “We’ve been ripped off by China for a long time.”
The White House in June already threatened to extend punishing US duties progressively to up to $450 billion in Chinese imports. Steep tariffs already are in place on $34 billion in Chinese goods, and a second tranche of $16 billion in products is under review and could soon be added.
Washington also is now targeting another $200 billion in imports which see fresh tariffs imposed as soon as September.
Published in The Express Tribune, July 22nd, 2018.
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