US President Donald Trump. Mr Trump has imposed tariffs on goods from
several countries to try to get better trade terms for the United
States. PHOTO | NICHOLAS KAMM | AFP
WASHINGTON,
President
Donald Trump on Friday launched a fresh attack on American trading
partners, saying the EU and China were manipulating their currencies,
and he threatened to hit all imports from China with high tariffs.
The
comments also signalled an undiminished appetite for battle on multiple
fronts after a week dominated by coverage of the fallout from his
dealings with Russian President Vladimir Putin.
The
harsh comments took fresh aim at pillars of the international economic
system and underscored Trump's break with long-established norms by
again openly rebuking the Federal Reserve for raising interest rates.
The
outbursts were another crosswind for Wall Street, which struggled to
find direction and finished the day a hair's breadth in negative
territory.
INTEREST RATE
In a pair of tweets, Trump said China, the
European Union and others had been "manipulating their currencies and
interest rates lower" while the US dollar strengthened, eroding "our big
competitive edge."
He said the Fed's course of tightening monetary policy now "hurts all that we have done."
The
Fed has raised the benchmark lending rate twice this year after three
increases in 2017 and two more rate hikes are expected this year as the
central bank removes stimulus from the economy to keep a lid on
inflation.
The chance inflation might
accelerate has increased after the massive tax cut Trump championed
last year, which has raised the US debt and budget deficit.
CHINESE IMPORTS
He
again said he was willing to ramp up his attacks on China, potentially
imposing punitive tariffs on all of the $505.6 billion in goods imported
from that nation.
"I'm ready to go to 500," Trump said in a CNBC interview that was broadcast Friday. "We've been ripped off by China for a long time."
The
White House in June already threatened to extend punishing US duties
progressively to up to $450 billion in Chinese imports.
Steep
tariffs already are in place on $34 billion in Chinese goods, and a
second tranche of $16 billion in products is under review and could soon
be added.
Washington also is now targeting another $200 billion in imports which see fresh tariffs imposed as soon as September.
Beijing
has vowed to hit back dollar-for-dollar and accused the United States
of starting the "largest trade war in economic history."
ESCALATING FIGHT
In the CNBC
interview broadcast Friday, Trump reiterated his claim that the United
States is "being taken advantage of" on issues including trade policy.
The US-China spat is the largest and broadest of several trade fights picked by Trump.
The
growing share of international trade under threat — including the
tariffs on autos and auto parts now under consideration — could harm the
global economy by disrupting manufacturing supply chains, raising
prices and causing firms to hold off on new investments.
In the CNBC interview, Trump also said he was "not happy" the Fed planned to continue raising benchmark lending rates.
"I'm not thrilled," he said. "Because we go up and every time you go up they want to raise rates again."
CHINESE YUAN
He
likewise also took aim at the dollar, saying a higher value "puts us at
a disadvantage" and adding that the Chinese yuan "has been dropping
like a rock."
"The US should be
allowed to recapture what was lost due to illegal currency manipulation
and BAD Trade Deals," Trump said on Twitter.
The
comments, plus Trump's criticism of Federal Reserve interest rate
hikes, had sent the dollar tumbling against a basket of currencies.
After
sliding recently to its lowest levels in a year in April as the Sino-US
trade conflict heated up, the yuan strengthened to around 6.77 by the
close Friday.
Despite Trump's claim,
the yuan has been rising steadily if gradually in recent years, as most
economists and officials say Beijing actually has been intervening in
currency markets to keep the currency from weakening.
However, analysts said China may be willing to allow further depreciation as the trade war rumbles on.
"The
(yuan's) slide against the US dollar will substantially cushion the
impact on Chinese exporters from the planned next round of US tariffs,"
Rajiv Biswas, chief Asia economist with IHS Markit, told AFP
The US dollar, meanwhile, continued its decline against the euro and pound.
"Currency is now part of the trade war folks," said Greg McKenna, chief market strategist at AxiTrader.
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