Trump Ups the Ante in the U.S.-China Trade War

Chinese yuan

Chinese yuan

The comments also signalled an undiminished appetite for battle on multiple fronts after a week dominated by coverage of the fallout from his dealings with Russian President Vladimir Putin.

The outbursts were another crosswind for Wall Street, which struggled to find direction and finished the day a hair's breadth in negative territory.

"I've been surprised that up until now, markets seem overly sanguine about the risks" of a trade war between the world's two biggest economies, said David Dollar, senior fellow at the Brookings Institution's China studies center and a former official at the World Bank and U.S. Treasury Department.

Trump told CNBC on Thursday that he was "not thrilled" that the U.S. central bank is raising interest rates as the economy improves, Xinhua reported. Two more rate hikes are still expected this year; Trump's massive tax breaks have raised fears that they could accelerate inflation.

The US$500 billion figure is about the value of Chinese goods imported into the US a year ago.

"I'm ready to go 500", the Republican leader told the USA network CNBC, referring to the US$505.5 billion (RM2.055 trillion) in Chinese imports accepted into the United States in 2017.

THE ongoing US-China trade tension may disturb the typical summer lull, while disappointing Chinese activity data (Monday) should remind investors that the current trade dispute is occurring when the Chinese economy is already slowing. Chinese imports from the USA totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion.

This comes after the White House proposed placing additional tariffs on Chinese goods, because the country imposed $34 billion worth of retaliatory tariffs on the U.S. The figure is roughly double the value of Chinese products on which Trump has already imposed or threatened to impose tariffs-and almost equal to the total value of goods and services America purchased from China past year.

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Analysts suggest Beijing is willing to let the yuan depreciate the longer the trade war rumbles on.

US President Donald Trump ramped up his criticism of global monetary policy as well as his own central bank, saying in tweets that multiple nations are manipulating currencies to the detriment of the U.S. The U.S. -China spat is the largest and broadest of several trade fights picked by Mr. Trump.

He had told CNBC that he was "not thrilled" that the USA central bank is raising interest rates as the economy improves, and in his tweet repeated his claim that the Fed is undoing the economic progress the country has seen during his presidency. Trump said on Twitter. Fielding Chen and Tom Orlik wrote in their analysis Friday that "there's a sense that the decline is in line with Beijing's wishes and - if they want - under their control".

The Chinese government has let the yuan weaken by around 4% against the dollar in the past month, among the sharpest one-month drops in value in its history. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals.

However, his administration appears "determined to push down the value of the U.S. dollar", says Markets.com, in order to help United States companies compete overseas, a key plank of Trump's attempt to make trade "fairer".

"Chinese authorities have been responding to Mr. Trump's threat of tariffs (by) continuously devaluing the yuan, a policy move that has the impact of making exports into China more expensive", said Boris Schlossberg, managing director at BK Asset Management.

The US dollar, meanwhile, continued its decline against the euro and pound.

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