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.