$500 billion tariffs

Trump threatens tariffs on all $500 billion worth of Chinese imports

By LOUIS NELSON

President Donald Trump said Thursday that he is prepared to impose tariffs on all $500 billion worth of Chinese imports and will work to reset a trade relationship that he says is unfair, regardless of the implications it may have on the stock market or November’s midterm elections.

Trump told CNBC in an interview that aired Friday morning that he wants China “to do well” and that “I don’t want them to be scared,” but said he will not tolerate Beijing imposing retaliatory tariffs as he tries to end the trade imbalance between the two nations. The president said he would be willing to impose tariffs on $500 billion worth of Chinese imports, which is roughly the total value of the country’s imports to the U.S.

“We’re down a tremendous amount. I raised 50 [billion dollars in tariffs] and they matched us. I say ‘you don’t match us, you can’t match us,’ because otherwise we’re always going to be behind the eight ball,” Trump told CNBC’s “Squawk Box.”

“Are you ready to go to 500 [billion dollars]?” interviewer Joe Kernen followed up.

“I’m ready to go to 500,” the president replied.

Pressed by Kernen about the possibility that such a move could drag down the stock market, Trump said “if it does, it does.” He also said he is concerned only with the principle of fairness when it comes to America’s trade relationship with China, not with the potential political trouble that a trade war with Beijing could stir ahead of November’s midterm elections.

“Look, I’m not doing this for politics,” he said. “I’m doing this to do the right thing for our country. We’ve been ripped off by China for a long time. And I told that to [Chinese] President Xi [Jinping].”

Later Friday morning, Trump accused both China and the European Union of currency manipulation and other economic measures that he said unfairly cut into U.S. economic gains. Those steps by the EU and China, Trump said, are made worse by the Federal Reserve’s gradual interest rate increases, which he also complained about in his CNBC interview, breaking a long-held tradition that the Federal Reserve be allowed to operate independently without political pressure from the White House.

“China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field,” Trump wrote on Twitter. “The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?”

Trump has made resetting U.S. trade relationships around the globe a priority for his administration in recent months, controversially targeting longtime allies and partners like South Korea, Mexico, Canada and the European Union.

But the president has saved specific ire for China, a nation he has accused of unfair trade practices, including intellectual property theft and forced technology transfers. Already, Washington and Beijing have imposed tit-for-tat tariffs on each other, with China’s batch targeting key industries in states Trump carried in the 2016 presidential election.

The back-and-forth between the two nations has sparked concerns of a looming trade war that could slow down what has been a strong economy under Trump. The president, for his part, has been publicly unconcerned about a trade war, writing on Twitter months ago that trade wars “are good, and easy to win.”

Among the most vulnerable American industries in any trade war would be the agriculture sector, which relies on exports to China for a significant portion of its annual revenue. Trump has promised that his economic strategy will ultimately benefit farmers, even if there is short-term pain, and sought Friday to offer further reassurances.

“Farmers have been on a downward trend for 15 years. The price of soybeans has fallen 50% since 5 years before the Election,” Trump wrote online. “A big reason is bad (terrible) Trade Deals with other countries. They put on massive Tariffs and Barriers. Canada charges 275% on Dairy. Farmers will WIN!”