Trump Should Focus His Trade War on China


President Donald Trump said he was ready to impose tariffs on all $500 billion of goods the United States imports from China, remarks that sent financial markets retreating and threatened to escalate a trade clash with the Asian giant.

The United States is now disputing retaliatory tariffs by China, the European Union, Canada, Mexico and Turkey, in response to new USA duties on steel and aluminum.

Trump in a tweet blamed poor soybean prices on "bad (terrible) Trade Deals" with USA trading partners in the past.

"A big reason is bad (terrible) Trade Deals with other countries", Trump said.

President Donald Trump is predicting that USA farmers will emerge victorious from a trade dispute that has hurt soybean prices.

The U.S. Government put a 15% tariff on US$34 billion of Chinese goods in mid-June, to which China retaliated with duties of its own, hitting U.S. imports of fruit including cherries, citrus and apples.

Trump has also targeted steel and aluminum exports from the EU and has threatened to tax European cars sold on the American market.

Against the Japanese yen, the dollar recouped some of its losses after dropping as low as 112.05 yen from a six-month high of 113.18 yen on Thursday.

The dollar index, which measures the greenback against six major peers, was down 0.70 per cent at 94.441 in late trading on Friday.

The White House on Thursday attempted to ensure markets that the Fed maintains its independence after the CNBC interview was aired.

The tweet comes as Trump is indicating he may escalate his trade fight with China and showing a willingness to place tariffs on up to $500 billion in products imported from China.

"But I don't like all of this work that goes into doing what we're doing", Trump said, arguing that the Fed's hikes could disrupt economic growth.

The Trump administration is threatening to impose fresh tariffs of 10% on another $200bn of Chinese goods, which Beijing has called "totally unacceptable".

In an apparent reference to Fed rate increases, Mr Trump added, "Tightening now hurts all that we have done". Chairman Jerome Powell has played down concerns about Trump's politicizing the Fed.

"I'm not thrilled", Trump said in his interview with CNBC.

The Fed has raised interest rates twice already this year.

Benchmark 10-year USA notes last fell 12/32 in price to yield 2.8894 percent, from 2.847 percent late on Thursday.

Many companies in the U.S. are opposed to the administration's use of tariffs against China, saying they risk hurting business and the economy without being likely to change behaviour.

"The United States should not be penalized because we are doing so well", Trump said in a tweet Friday morning. When it came to interest rates, Nixon told his advisers "we'll take inflation if necessary, but we can't take unemployment".

"All those things point to the Fed continuing to raise interest rates and the economy being fairly strong, relative to all the global issues going on: trade wars, the fear in Europe of Brexit without a clear path".