In a recent interview with CNBC, President Donald Trump made it clear that he is ready to imposed tariffs on all of the $505.5 billion in goods from China that were imported last year.
“I’m ready to go to 500. I’m not doing this for politics. I’m doing this to do the right thing for our country,” said Trump on Friday to CNBC. “We are being taken advantage of and I don’t like it.”
So far, the Trump administration has imposed 25 percent taxes on $34 billion of Chinese goods. But this appears to be just the beginning.
Another $16 billion of Chinese goods will be imposed to more tariffs shortly and the administration also released a list of $200 billion of Chinese goods that will be subjected to 10 percent tariffs.
Trump also expressed disappointment in the Federal Reserve for increasing interest rates.
“In the same interview, taped Thursday at the White House, Trump broke with a long-standing tradition at the White House and voiced displeasure about recent actions at the U.S. Federal Reserve. Both political and economic officials believe that the central bank needs to operate free of political pressure from the White House or elsewhere to properly manage interest rate policy,” writes Newsmax.
The Fed is expected to raise the interest rate two more times this year.
But higher interest rates would increase the value of the U.S. dollar, therefore, increasing trade deficits.
China only imported about $130 billion in American goods last year.
“China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field…” tweeted Trump after the CNBC interview. “….The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?”
Author’s note: Trump is determined to improve the trade deficit with China. Tariffs on almost all exports from China would be a massive blow to them. Because the U.S. exports less to China, the U.S. won’t be as affected if China slaps us with even more tariffs in response. China is also violating intellectual property and selling trade secrets from U.S. companies and then in turn selling these copycat products for cheaper to U.S. consumers. The trade deficit needs to be addressed and Trump is trying to make it right.
Editor’s note: If we were not willing to take this to the brink, we would have no chance of balancing our trade with China and protecting our intellectual property. Trump must play this at 100% strength.