The escalating trade confrontation between Washington and Beijing threatened to boil over Friday after President Donald Trump lashed out again and China called on the EU to join the battle, sending global stocks into the red.
WASHINGTON: The escalating trade confrontation between Washington and Beijing threatened to boil over on Friday (Apr 6) after President Donald Trump lashed out again and China called on the European Union to join the battle, sending global stocks into the red.
Trump remained defiant and argued the pain of the dispute will pay off in the end, while China said that his administration would only «shoot itself in the foot» if it didn’t back down from the «extremely wrong» threats.
Treasury Secretary Steven Mnuchin acknowledged there was a risk of a trade war, but said the intention is to defend US interests and the administration remains willing to negotiate.
But top White House economic advisor Larry Kudlow reversed himself, and warned that the tariff threat is not a negotiating tactic.
Global stock markets were unhappy with the turn of events, as Wall Street dropped more than two percent, following European and Asian markets lower.
In the wake of the decision to impose steep tariffs on steel and aluminium imports, the United States on Tuesday published a list of US$50 billion in Chinese goods to be hit by tariffs over what Washington says is widespread theft of intellectual property and technology.
China retaliated by unveiling planned levies on US$50 billion worth of major US exports including soybeans, cars and small aircraft.
Trump hit back again late Thursday, instructing trade officials to consider tariffs on an additional US$100 billion in imports.
«Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,» Trump said, calling Beijing’s reaction «unfair.»
So far, only the tariffs on steel and aluminum have taken effect, but Trump’s latest threats take the dispute to a new level: China cannot retaliate in kind since it only imports US$130 billion in US products, meaning it would have to find another way to respond.
Amid widespread concern, and calls for restraint from US businesses and farm states most vulnerable to Chinese retaliation, Trump said Friday the outcome would be worth the short-term risk.
