Trump Says "We Don't Need China" then "Orders" Businesses to Find Alternative
We Don't Need China
Trade and currency wars took another huge leap forward just one day after another oft-repeated message that a deal with China is coming.
The Wall Street Journal reports Trump Orders U.S. Businesses to Find Alternative to China.
President Trump said U.S. companies were “hereby ordered” to start looking for alternatives to doing business in China after Beijing said it would impose tariffs on $75 billion worth of additional U.S. products.
“Our Country has lost, stupidly, Trillions of Dollars with China over many years,” Mr. Trump wrote in a series of tweets. “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 better off without them.”
Mr. Trump’s comments came in response to China’s plan, laid out Friday, to impose tariffs of 5% and 10% on almost all the remaining U.S. imports on which it has yet to impose punitive taxes, including vehicles and car parts, in retaliation against U.S. moves to slap punitive tariffs on an additional $300 billion of Chinese goods.
The president demanded that U.S. companies “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
Items China plans to impose tariffs on include agricultural products, apparel, chemicals and textiles.
Some major car companies will be hit hard by the increase in tariffs, particularly Tesla Inc.and Ford Motor Co., as well as Germany’s BMW AG and Daimler AG ’s Mercedes-Benz. These companies build a significant number of vehicles in the U.S. for export to China—mostly premium models—and a higher tariff could force them to raise prices.
Soon after President Trump announced his plans for fresh tariffs set for Sept. 1, Beijing responded by officially announcing the freezing of purchases of U.S. agricultural products and letting its currency drop to its lowest level in a decade. A weaker yuan makes Chinese exports cheaper.
Bond yields are tumbling, the DOW is down 500 points, The Yuan is hitting new lows and gold is up $30.
Mike "Mish" Shedlock