President Donald Trump and his top aides on Wednesday insisted the United States did not touch off a trade war with China, even as the two countries have stepped up retaliatory actions and as the White House acknowledged there could be some “short-term pain,” Politico reported.
The Chinese government on Wednesday moved to impose new tariffs on imports of U.S. soybeans, cars, aircraft and chemicals — an aggressive response to the tariffs Trump has recently slapped on China, sending markets into a temporary dive.
The President added to the tensions by firing off a pair of inflammatory tweets early Wednesday. “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!” he wrote.
As markets swooned, the Dow Jones Industrial Average dipped nearly 500 points early in the day. Trump’s new National Economic Council director, Larry Kudlow, rushed to reassure traders that the President knew what he was doing.
“Bear in mind, Stu, these are just the first proposals. In the United States, at least, we’re putting it out for comment. We’re going to take a couple months. I doubt if there’d be any concrete action for several months. We’ll see how that plays out. Nothing concrete has actually happened,” Kudlow said on Fox Business.
Kudlow, a former CNBC anchor who early last month published an op-ed titled, “Mr. President, tariffs are really tax hikes,” also spoke with reporters outside the White House, again using a more conciliatory tone than Trump. “So he wants to solve this with the least amount of pain, and again, here is the key point. Both sides benefit by positive solutions that lower barriers and open markets,” he said, Politico informs.
While markets roared back later in the day, White House Press Secretary Sarah Huckabee Sanders appeared to acknowledge at the daily press briefing that Trump’s tariff moves could cause hiccups for global markets, but would pay dividends down the road.
“We may have a little bit of short-term pain, but we’re certainly going to have long-term success, and we’re focused on long-term economic principles and making sure that we have a strong and stable economy,” Sanders said.
In total, the Chinese Commerce Department announced on Wednesday new tariffs on 106 U.S. goods amounting to roughly $50 billion in imports. The Chinese tariffs followed an announcement from the Trump administration of tariffs to be imposed on Chinese electronics and machinery, as well as aerospace products.
The two sets of tariffs deal with some of the biggest components of international trade between the two nations. China is the largest buyer of U.S. soybeans, while Chinese technology manufacturers play a key role in the supply chains of major U.S. tech companies, Politico adds.