By Jonathan Garber FOXBusiness
Does China need the US more than we need China?
First Trust Advisors Chief Economist Brian Wesbury on U.S. trade tensions with China.
President Trump lashed out at China in a fiery tweet storm Friday morning, warning he will be responding later this afternoon to Beijing’s most recent escalation of the trade war.
In a series of tweets, Trump accused Beijing of stealing “vast amounts of wealth from the U.S.,” and ordered American companies to find alternatives to doing business with China. U.S. equity markets sold off sharply.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,” Trump tweeted on Friday. “I will be responding to China’s Tariffs this afternoon.”
Donald J. Trump✔@realDonaldTrump · 4h
Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far….
Donald J. Trump✔@realDonaldTrump
….better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..28.4K10:59 AM – Aug 23, 2019
Donald J. Trump✔@realDonaldTrump · 4hReplying to @realDonaldTrump
….your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE,….
Donald J. Trump✔@realDonaldTrump
….all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop – it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!51.1K10:59 AM – Aug 23, 2019
Friday morning, Beijing said it would slap tariffs of 5 or 10 percent on $75 billion of U.S. goods, set go to into effect on Sept. 1 and Dec. 15. China also announced it would reinstate a 25 percent tariff on U.S. cars and a 5 percent tariff on auto parts.
The tariffs were a response to Trump’s announcement earlier this month that new taxes would hit Chinese goods. Trump on Aug. 1 said the U.S., beginning next month, would place a 10 percent tariff on $300 billion worth of Chinese goods, adding they could go “well beyond 25 percent” if necessary.
Beijing responded by letting its currency, the yuan, weaken below seven per dollar for the first time in over a decade. The Trump administration then delayed the tariffs on about 60 percent of those goods until Dec. 15.
A further escalation of the trade war could zap investor confidence and roil markets, which have already been grappling with a slowing U.S. economy.
The U.S. economy grew at a 2.1 percent annualized rate in the second quarter, down from 3.1 percent the prior quarter. Last week, the spread between the U.S. 2-year and 10-year yields turned negative for the first time in over a decade. Such an event that has preceded every U.S. recession of the past 50 years.
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“The risk here for China when it does things like this is simply to galvanize support even more the president,” Office of Trade and Manufacturing Director Peter Navarro told FOX Business’ “Maria in the Mornings” on Friday, adding that “we are all China hawks now.”
