WASHINGTON: US President Donald Trump said on Friday that he was ready to impose tariffs on every dollar of imports from China, which exceeded $505 billion in 2017.
The Wall Street Journal noted that Mr Trump’s comments had an immediate impact on global markets, sending the stocks lower.
“I’m ready to go to 500,” the president told CNBC’s Joe Kernen in a “Squawk Box” interview aired on Friday.
“I’m not doing this for politics, I’m doing this to do the right thing for our country,” he said. “We have been ripped off by China for a long time.”
Mr Trump complained that the US was “being taken advantage of” on a number of fronts, including trade and monetary policy. Yet he said he has not pushed the tariffs out of any ill will toward China.
“I don’t want them to be scared. I want them to do well,” he said. “I really like President Xi a lot, but it was very unfair.”
Mr Trump also criticised previous US administrations for not standing up to China, claiming that unspecified Chinese officials told him “nobody would ever complain until you came along — me. They said, ‘Now you’re more than complaining. We don’t like what you’re doing.’”
Data released by the US Census Bureau show that in 2017, the US imported 505.5 billion worth of goods from China, while its exports to China amounted to only $129.9bn.
Determined to correct this imbalance, the Trump Administration has already slapped tariffs on $34bn of Chinese products, which China met with retaliatory duties. Earlier this month, the US also scheduled additional tariffs on $16bn of Chinese electronics and other components.
Last week, the Trump administration also identified a further $200bn in Chinese goods it may target for tariffs, for a total of $250bn.
In earlier statements, Mr Trump warned that he was willing to go beyond the $250bn amount if China retaliated. But this is the first time that he spoke of targeting every dollar of imports from China.
When asked during Friday’s interview, “Will you ever get to 500, though?” Mr Trump responded that he was. “I’m doing this to do the right thing for our country. We have been ripped off by China for a long time,” he said.
China has pledged to retaliate against US tariffs in “equal scale and equal strength.”
The CNBC report noted that while China cannot match US tariffs because of the trade imbalance, it had other options too: “China holds $1 trillion worth of US treasury bonds. If it stops buying new bonds, or sells off its holdings, it would trigger a hike in yields putting pressure on America’s debt load.”
China can also undo the impact of the US tariffs by devaluing the yuan by 8 per cent. The Chinese government could also make it harder for US companies to operate in China.
The Wall Street Journal noted that Friday morning’s CNBC interview sent European stocks lower, with the Stoxx Europe 600 falling around 0.7pc before recovering some of its losses. Shares in trade-sensitive stocks were hardest hit, with auto makers Daimler, Volkswagen and Fiat Chrysler all down more than 1pc.
Published in Dawn, July 21st, 2018