President Trump Eyes an Additional $500B Worth of Tariffs on Chinese Goods

Lighthizer to testify before Senate next week as trade war ramps

Greg Nash

US President Donald Trump stepped up attacks on China and the European Union on Friday, accusing them of manipulating their national currencies and interest rates.

Trump's assertions, made in a series of morning tweets, came a day after he broke with decades of traditional White House silence on Federal Reserve decisions, criticizing the nation's independent central bank for raising interest rates during a television interview.

Earlier this month, the United States levied tariffs on $US34 billion worth of Chinese goods, prompting retaliation from China that has hit U.S. farmers particularly hard, including in states that Trump won in the 2016 presidential election.

On Thursday, the European Union said it was developing plans to hit back at the USA if it attempted to place import tariffs on cars, something Trump has repeatedly threatened to do.

Treasury yields edged lower on Thursday after President Trump said he disagreed with Fed policy on interest rates and objected to a strong dollar.

Trump, in posts on Twitter, also lamented the strength of the US dollar and accused the European Union and China of manipulating their currencies.

The White House in June already threatened to extend punishing United States duties progressively to up to $450 billion in Chinese imports.

As the US-China trade war continues to undermine global economic confidence, Donald Trump sparked new fears among investors last night by threatening a currency war with Beijing.

But one JPMorgan economists thinks Trump's public desire for lower interest rates could actually backfire. "But at the same time I'm letting them do what they feel is best", he said.

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A wide array of Republican and Democratic lawmakers condemned Trump's position, calling it embarrassing , a disgrace and shameful. The damage inflicted by President Trump's naiveté, egotism, false equivalence, and sympathy for autocrats is hard to calculate.

US Federal Reserve Chair Jerome "Jay" Powell, who was appointed by Mr Trump earlier this year, said this week that policymakers remain committed to further, gradual increases.

Hoping to keep a lid on inflation as the world's largest economy gathers pace, the Fed has raised its benchmark lending rate seven times since 2015 and expects two more rate hikes this year. "Because we go up and every time you go up they want to raise rates again".

Interest rate hikes can suppress investment and the unemployment rate, two metrics Trump and Republicans touted frequently throughout his presidency.

In an interview with CNBC, Trump said, "I'm willing to go to 500", referring to the $505.5 billion in goods imported from China in 2017.

"I'm not thrilled", Trump told the network in an interview excerpt aired yesterday. I don't really - I'm not happy about it.

Trump's dismissal of economic-policy tenets shifts attention during a week when he's facing growing pressure over his relationship with Russian President Vladimir Putin and his lukewarm support for the finding by USA intelligence agencies that Russia meddled in the 2016 election.

"And it is worth pondering whether this is a president who is going to break with 25-30 years of tradition in not interfering in Fed policy deliberations going forward".

In a pair of tweets following the interview, Trump accused both China and the European Union of manipulating their currencies to keep interest rates low.

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