President Donald Trump said Friday he was ready to increase tariffs on China-made goods to as much as $500 billion in order to address what he has called an unfair trade deficit with the world's second largest economy.
In an interview with CNBC television, broadcast Friday, insisted he wasn't concerned about the political implications of his decision to take on China's trade surplus, which hit a record $133.8 billion over the first six months of the year, and said the stock market could be significantly higher if he were to abandon the various trade disputes he's ignited with Beijing, Brussels and London.
"This is the time," he said, to go after the trade imbalances between Washington and its allies and competitors. "You know the expression, 'we're playing with the bank's money?' This is the time."
"I could have a much easier life if I wanted to do things incorrectly," he said. "I could have a higher stock market right now, it's already up 40% since the election, it could be up 80% if I didn't want to do this, but ultimately what I'm doing it making things right."
In earlier remarks, published late Thursday, Trump said he wasn't happy to see "all of this work that we're putting into the economy and then I see rates going up", adding that the concurrent strength of the U.S. dollar on foreign exchange markets puts the country at a disadvantage.
The dollar index responded to the President's comments in overnight trading, falling 1.5% from yesterday's July 17 high against a basket of six global currencies while investors modestly reduced bets of Fed rate hike December, according to the CME Group's FedWatch tool.
U.S. equity futures also extended their pre-market declines, with contracts tied to the Dow Jones Industrial Average
"Sitting here, I could just let all of these countries continue on with their massive deficits ... they are taking advantage of us. We are being taken advantage of and I don't like it."
"China has $507 billion a year in deficits with the United States," the President said, citing figures that contrast sharply with official data that pegs the 2017 total at $375 billion. "With the EU, $151 billion, with Mexico $120 billion. Mexico, who would think Mexico?"
His comments were broadcast just as Germany's Chancellor, Angela Merkel, said the situation in global trade was "very serious" and that the application of new U.S. tariffs on European-made cars, something Trump has threatened on several occasions, would violate WTO rules.
"We see these potential tariffs not only as a violation of WTO rules, but also as a real threat to the prosperty of many in the world," she told reporters during a wide-ranging press conference in Berlin.
Merkel added that the EU is working on counter measures to U.S. tariffs, but insisted that was "by far" the worst solution for the ongoing dispute as European Commission President Jean-Claude Juncker prepares for a key trade summit with Trump next week in Washington.