A trade expert from Northwestern University says the Trump administration’s tariff hikes will be painful for consumers. U.S. import taxes on $200 billion of Chinese goods jumped to 25% on Friday, from 10%, (May 10)
WASHINGTON – A day after the stock market tumbled because of trade friction between the U.S. and China, President Donald Trump sought to put a positive spin on the fight, dismissing it as “a little squabble” and denying that negotiations between the two economic powers have collapsed.
Trump insisted Tuesday he has an “extraordinary” relationship with Chinese President Xi Jinping and that the two countries continue to have a good dialogue, even though trade talks ended abruptly on Friday without producing a new trade deal.
At the same time, Trump continued to threaten imposing new tariffs on $300 billion in Chinese goods – a move that would amount to barriers on virtually all imports from China.
“We’re looking at that very strongly,” Trump told reporters from the White House South Lawn while departing for Louisiana.
China wants to make a deal, Trump said, and “it’s absolutely going to happen.”
“I think it’s going to turn out extremely well,” he said. “We’re in a very strong position.”
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China’s Foreign Ministry struck a more combative tone during a briefing Tuesday, saying the U.S. should not “underestimate China’s determination and will to safeguard its interests.”
“China doesn’t want a trade war, but we are not afraid of fighting one,” said Chinese Foreign Ministry spokesman Geng Shuang. “If someone brings the war to our doorstep, we will fight to the end. China never succumbs to external pressure. We have the resolve and capability to defend our lawful and legitimate rights and interests.”
The stock market had its worst day in months on Monday after China announced it would place tariffs ranging from 5% to 25% on $60 billion in U.S. goods. The duties are scheduled to take effect June 1 and will impact a wide range of U.S. products, including coffee, beef, salmon, flowers and some fruits and vegetables.
China’s retaliation followed the Trump administration’s decision on Friday to raise tariffs on $200 billion in Chinese products to 25% from 10% after trade talks between the two countries ended without a new trade deal.
Trump’s decision to raise duties on Chinese products is “contrary to the consensus between China and the United States on resolving trade differences through consultations,” China’s Ministry of Finance said. The U.S.’s actions are “jeopardizing the interests of both sides and not meeting the general expectations of the international community,” China said.
The U.S. also has started the process of placing tariffs on another $300 billion in Chinese goods, including rifles, agriculture and dairy products, clocks, flowers, sewing machines, drapes, clothing, shoes, wigs, jewelry, lawnmowers, musical instruments, brooms and cellphones and other electronics.
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Earlier Tuesday, Trump wrote on Twitter that he would make a trade deal with China “when the time is right” but said any agreement “must be a great deal for the United States or it just doesn’t make any sense.”
“We have to be allowed to make up some of the tremendous ground we have lost to China on Trade since the ridiculous one sided formation of the WTO,” he wrote. “ It will all happen, and much faster than people think!”
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