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Trump Threatens China with $500 Billion in Tariffs; Shrugs Off Impact on Stocks

EconomyJul 20, 2018 09:01AM ET
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© Reuters. Trump ups the ante in trade tariffs on China, dismisses possible negative impact on stocks

Investing.com - U.S. President Donald Trump indicated that he is ready to impose tariffs on $500 billion worth of Chinese goods to the U.S. if China does not back down on its trade policies and shrugged off the impact on the stock market, sending waves through U.S. equities.

"I'm ready to go to 500," the president said in the full interview with CNBC that was released on Friday after previous parts regarding the Federal Reserve and the Chinese yuan had been pre-aired a day earlier.

In the interview, Trump claimed that America is being “taken advantage of” by China, the EU, Mexico, and Japan, because they all run trade surpluses with the US.

Specifically on China, Trump says America is “down a tremendous amount”, referring to a trade deficit of at least $375 billion and promised that he would fix it.

“I’m not doing this for politics, I’m doing this to do the right thing for our country. We have been ripped off by China for a long time,” Trump explained.

The U.S. has already imposed tariffs on $34 billion of Chinese goods, with another $200 billion being looked at. China has already retaliated with $34 billion of its own tariffs.

The strategy behind Trump’s move appeared to be to outstrip any possible retaliation as U.S. Census Bureau data showed that the U.S. only exported $129.9 billion to China in 2017.

“I raised ($50 billion), and they matched us. I said: ‘you don’t match us, you can’t match us because otherwise we’re always gonna be behind the A ball’,” Trump explained.

Trump dismisses negative impact on stocks

Trump also shrugged off worries about the negative impact on stock markets from escalating trade tensions.

CNBC pointed out that the mid-term elections were on the horizon and asked, “What if the stock market were to go down?”

“If it does, it does,” Trump responded, insisting that he was doing what was right for the American economy.

Indeed, U.S. stock futures took a dive in reaction to the news. Nasdaq 100 futures had been trading about 0.4% higher prior to the release as tech shares were supported by positive earnings from Microsoft (NASDAQ:MSFT). After briefly turning negative, they were last up 0.13% as of 7:00AM ET (11:00 GMT). Dow futures and S&P 500 futures extended earlier losses and were last trading down 0.36% and 0.22%, respectively.

Trump Threatens China with $500 Billion in Tariffs; Shrugs Off Impact on Stocks
 

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Comments (10)
Blue Finance
Blue Finance Jul 25, 2018 9:31AM ET
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It is the reason a América first again or Capital América was work the time now is another there are any people and tecnologies the same way at all...Trump making mess
Peter Ju
Peter Ju Jul 20, 2018 10:19AM ET
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Trump’s thought is simply and clear : Trade war won’t hurt US economy and Powell’s speech is wrong. Anybody hurt the economy is opposite to USA. EU is enemy, China is enemy. Now FED chairman against Trump to become a suspect enemy of America?!
Darryl Parvin
Darryl Parvin Jul 20, 2018 9:42AM ET
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Friend of mine reads Chinese and he said people would recoil in horror if they knew of the level of exterminationist, racist ****that gets posted continuously on major Chinese forums with no restrictions whatsoever from their government . They have to be stopped.
Edian Gilmore
Edian Gilmore Jul 20, 2018 8:23AM ET
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Cut off China 100% that all they understand, get rid of them.
Suman Jutur
Suman Jutur Jul 20, 2018 8:10AM ET
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China should start importing Iranian oil and pay in goods.
Jeff Chevalier
Jeff Chevalier Jul 20, 2018 8:08AM ET
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China can get everything it needs from the EU. Meanwhile the u.s. thrives on cheap Chinese goods. Guess who loses?
Suman Jutur
Suman Jutur Jul 20, 2018 8:08AM ET
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Exactly
Franklin Adinnu
Franklin Adinnu Jul 20, 2018 8:08AM ET
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USA is the biggest Chinese market... They can't afford to lose it
Pitou Khmer
Pitou Khmer Jul 20, 2018 7:48AM ET
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Does this affect to the online business like Amazon?
Suman Jutur
Suman Jutur Jul 20, 2018 7:46AM ET
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Just noice. Usual baseless threats
Paul Davidson
Paul Davidson Jul 20, 2018 7:43AM ET
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Who does the Fanta Menace think is going to buy all his debt when he's running up trillion-dollar deficits? China, Japan, and Europe can't unless they have surplus US dollars.
Ervin Qosja
Ervin Qosja Jul 20, 2018 7:12AM ET
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yes but you are sorrounded with money that cant buy anything exept imported china goods
 
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