White House trade advisor Peter Navarro said in an interview Friday that the United States will respond forcefully should China decide to devalue the yuan again, as part of its strategy in the ongoing trade war.
“Clearly, they are manipulating their currency from a trade point of view. They’re going to, and we’re going to take strong action against them,” Navarro told CNBC’s “Closing Bell”.
Earlier this week, China decreased the value of its currency against the dollar to the lowest levels in over a decade in an effort to counter the effects of the tariffs imposed by the U.S. As a result, the Trump administration labeled the country a “currency manipulator.”
“China has devalued its currency by over 10% with the express purpose of neutralizing tariffs, full stop,” Navarro said, referring to the latest 10% tariffs on $300 billion worth of Chinese goods, announced by President Donald Trump.
At the time, the President argued that the tariffs came in response to China’s failure to purchase American farm goods as promised, escalating tensions in the already full-blown trade war. China retaliated by announcing that it would stop buying American agricultural products altogether.
Navarro stressed in the interview that no U.S. farmer would “be hurt by China,” saying also that it is Chinese consumers who will bear the brunt of the trade war.
“China will bear virtually the entire burden of that through the currency manipulation and by slashing prices. China is the one that suffers far more harm than what might be inflicted on us,” he noted, adding that White House officials plan to have Chinese negotiators back to the U.S. for trade talks over the following next months.
Meanwhile, President Trump said Friday that the country will halt all business dealings with Chinese telecom giant Huawei, in yet another escalation of the trade conflict between the world’s two largest economies.
“We are not going to do business with Huawei. … And I really made the decision. It’s much simpler not doing any business with Huawei. … That doesn’t mean we won’t agree to something if and when we make a trade deal,” Trump said.
“We are talking to China; we are not ready to make a deal, but we’ll see what happens … China wants to do something, but I’m not doing anything yet. Twenty-five years of abuse. I’m not ready so fast,” he continued.
The Commerce Department explained that the President’s comments referred only to the government’s ban on buying products from Huawei and that special licenses for companies to restart sales to Huawei will continue to be processed.