USA stocks dip as Trump talks of more tariffs on China

USA stocks dip as Trump talks of more tariffs on China

USA stocks dip as Trump talks of more tariffs on China

President Trump said "I'm willing to go to 500", referring roughly to the $505.5-B in goods imported previous year from China.

Business Insider points to a report from Chinese publication Global Times claiming that Chinese textile manufacturers that produce Trump gear are having greater trouble getting their goods into the United States thanks to the current trade war between the USA and China. 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. But his remarks to CNBC caught financial markets by surprise Friday.

New Mexico Farm and Livestock Bureau President Craig Ogden said retaliatory Chinese tariffs on US pecans and new tariffs from Mexico on USA cheese products are likely to hurt producers in New Mexico.

United States equity markets responded negatively to Trump's comments, with all three major indices falling from their recent highs.

Beijing, meanwhile, has accused the United States of starting the "largest trade war in economic history" and has vowed to retaliate dollar-for-dollar.

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Also yesterday, Trump took to Twitter to drag the Federal Reserve into the trade brawl, assailing the USA central bank for its apparent reluctance to goose US exports with a weaker dollar.

St Louis Federal Reserve Bank's James Bullard said the Fed would remain unaffected by Mr Trump's comments on monetary policy and expressed concerns about rising tariffs. Those Chinese practices include cyber-theft and an insistence that American and other foreign companies hand over technology in exchange for access to the Chinese market.

Last week, the Trump administration also identified a further $200bn in Chinese goods it may target for tariffs, for a total of $250bn. That sparked a dollar-for-dollar response from Beijing. He says ECB President Mario Draghi may elect to step into the fray at the central bank's July 26 policy meeting, given American attempts to talk the dollar down in January were extremely unpopular in Frankfurt. Trump called the move the "right thing to do for our country", adding, "We have been ripped off by China for a long time".

Thus far in the burgeoning trade war, the U.S. has slapped tariffs on juts US$ 34bn of Chinese products, which China met with retaliatory duties. China took issue with US comments blaming China's president for blocking a trade deal, while the European Union may retaliate if the United States imposes tariffs on EU cars. If the yuan continues to depreciate, goods exported to China will become more expensive to consumers there and Chinese exports would also be relatively cheaper.

The U.S. dollar fell the most in three weeks against a basket of six major currencies, halting a rally that had driven the greenback to a year high.

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As the trade war escalates, so have analysts' estimates of potential economic consequences. Earlier this year, he invoked national security as a justification for taxing imported steel and aluminum.

The US imported $505 billion worth of goods from China in 2017, according to Census Bureau data.

"Automobiles - that's the 800-pound gorilla", Brookings' Dollar said.

After criticizing the Fed in an interview, Trump again lambasted the central bank, saying "Tightening now hurts all that we have done".

In a pair of tweets, Trump said "China, the European Union and others have been manipulating their currencies. while the raising rates while the dollar gets stronger and stronger with each passing day".

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