Trump dismisses fears of the long-lasting trade war
U.S. President Donald Trump, who announced last week he would slap a 10% tariff on a further $300 billion in Chinese imports starting on Sept. 1, tweeted that “massive amounts of money from China and other parts of the world” were pouring into the U.S. economy.
However, Trump dismissed fears of a protracted trade war with China on Tuesday despite a warning from Beijing that labeling it a currency manipulator would have severe consequences for the global financial order.
U.S. President also pledged to stand with American farmers in the face of Chinese retaliation. U.S. farmers, which a key political constituency for Trump, have been among the hardest hit in the trade war. Shipments of soybeans, the most valuable U.S. farm export, to top buyer China sank to a 16-year low in 2018.
The U.S. Treasury Department said on Monday it had determined for the first time since 1994 that Beijing was manipulating its currency. Meanwhile, China has halted U.S. agricultural purchases and raised the possibility of additional tariffs on U.S. farm products.
While Trump played down the prospect that the trade dispute could be drawn out, St. Louis Federal Reserve Bank President James Bullard said the U.S. central bank might be stuck with a volatile global trade environment for years.
“I think of trade regime uncertainty as simply being high in the current environment,” Bullard said at a National Economists Club luncheon. “I do not expect this uncertainty to dissipate in the quarters and years ahead.”