As trade war mounts Trump calls on US firms to exit China
WASHINGTON/BEIJING (Reuters) - President Donald Trump on Friday pressured US companies to leave China after Beijing unveiled retaliatory tariffs on $75 billion (61.11 billion pounds) in US goods, stoking fears their escalating trade war will tip the global economy into recession.
Trump, who has accused China of unfair trade practices and pushed for a deal that would rebalance the relationship in favour of US manufacturers and workers, said on Twitter he will issue a response to Beijing’s latest tariff plan on Friday afternoon.
The president was meeting with his trade team at midday, a senior White House official told Reuters.
“We don’t need China and, frankly, would be far 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,” Trump tweeted.
“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.”
It’s unclear what legal authority Trump would be able to use to compel US companies to close operations in China or stop sourcing products from the country.
Trump also said he was ordering shippers including FedEx (FDX.N). Amazon.com Inc (AMZN.O), UPS (UPS.N) and the U.S. Postal Service to search out and refuse all deliveries of the opioid fentanyl to the United States.
The US Chamber of Commerce rebuffed Trump’s call, urging “continued, constructive engagement” so that the world’s two largest economies could quickly reach a trade deal.
“Time is of the essence. We do not want to see a further deterioration of US-China relations,” Myron Brilliant, executive vice president and head of the business group’s international affairs, said in a statement.
China on Friday said it would impose retaliatory tariffs on $75 billion of US goods, targeting crude oil for the first time and renewing punitive duties on American-made autos.
The latest salvo was in response to Trump’s plans to impose 10% tariffs on a final $300 billion list of Chinese-made consumer goods on Sept 1 and Dec 15, including cell phones, toys, laptop computers and clothing.
China’s Commerce Ministry said that on those same dates it will impose additional tariffs of 5% or 10% on a total of 5,078 products originating from the United States including agricultural products such as soybeans, beef and pork, as well as small aircraft. Beijing is also reinstituting tariffs on cars and auto parts originating from the United States that it suspended last December as US-China trade talks accelerated.
“We want a deal, but it doesn’t mean we want a deal that is not based on mutual respect or good for China’s interests,” a Chinese diplomatic source said. “If the United States levies tariffs, China will have counter-measures.”
US stocks fell sharply. The tech-heavy Nasdaq Composite .IXIC was down 2.6%, the S&P 500 index .SPX fell 2.1% and the Dow Jones Industrial Average .DJI shed 1.9%. US Treasury yields also fell as investors sought safe-haven assets.
US crude futures were down more than 2%.
White House trade adviser Peter Navarro told Fox Business Network that US-China trade talks would nevertheless go ahead in September and dismissed the Chinese tariff threat as small in terms of the U.S. economy.
On Thursday, top White House economic adviser Larry Kudlow said there was progress in a deputy-level US-China trade call this week. But neither side so far appears to be ready to make a significant compromise needed to end the nearly 14-month-old trade war.
The trade dispute has stoked fears about a global recession, shaking investor confidence and prompting central banks around the world to ease policy in recent months.
In an interview on CNBC, Federal Reserve Bank of Cleveland President Loretta Mester said she viewed the Chinese retaliatory tariffs as “just a continuation” of the aggravated trade policy uncertainty that has begun weighing on U.S. business investment and sentiment.