Key points
- US president defends tariffs policy
- China has hit US with 125pc tariffs
- Trade war rages between world’s biggest economies
ISLAMABAD: United States President Donald Trump is optimistic about reaching a trade deal with China, White House press secretary Karoline Leavitt said on Friday, amid an escalating trade war between the two economic giants that has battered markets.
“The president has made it very clear he’s open to a deal with China,” Leavitt told a press briefing. “If China continues to retaliate, it’s not good for China,” she added.
According to Reuters news agency, Trump insisted that his tariff policy was “doing really well” despite China hiking levies on US goods to 125 per cent.
Trump sent financial markets into a tailspin by announcing sweeping import taxes on dozens of trade partners last week, only to abruptly roll them back to 10 per cent on Wednesday for 90 days — while raising levies on goods from China.
“Very exciting for America”
“We are doing really well on our tariff policy,” Trump said in a post on his Truth Social network after China announced its latest hike.
“Very exciting for America, and the World!!! It is moving along quickly,” he wrote.
The US and Beijing have been trading salvos of increasingly harsh tariffs since last week.
Chinese President Xi Jinping gave his first major comments on the tensions on Friday, with state media quoting him as saying his country was “not afraid.”
Xi also said the European Union and China should “jointly resist unilateral bullying practices” during talks with Spain’s Prime Minister Pedro Sanchez.
“Numbers game”
Beijing announced after Xi’s comments that new tariffs of 125 per cent on US goods would take effect Saturday – almost matching the staggering 145 percent level imposed on Chinese goods coming into America.
A Chinese Commerce Ministry spokesperson said the United States bore full responsibility, deriding Trump’s tariffs as a “numbers game” that “will become a joke.”
But China’s finance ministry said tariffs would not go any higher in an acknowledgement that almost no imports are possible at the new level.
Trump had reiterated on Thursday that he was looking to do a deal with Xi despite the mounting tensions.
“He’s been a friend of mine for a long period of time. I think that we’ll end up working out something that’s very good for both countries,” he told reporters.
Markets fret
But American officials have made it clear they expect Xi to reach out first.
Pressure was growing on Trump, however, as markets continued to fret.
As investors fled the dollar, which is typically considered a key haven currency, Trump attempted to squelch fears on Friday.
“We’re the currency of choice. We’re always going to be… I think the dollar is tremendous,” Trump told reporters aboard Air Force One, after the dollar plunged to its lowest level against the euro in more than three years.
Meanwhile, yields on crucial US government bonds, which are normally seen as a financial refuge, were up again Friday, indicating weaker demand as investors take fright, AFP reported.
Offloading
The White House said however that it had no evidence to support speculation by traders that China was offloading some of its vast holdings — which would increase the cost of borrowing for the US government — in retaliation.
Wall Street stocks finished higher Friday, concluding a rollercoaster week on a positive note amid hopes that the market has absorbed the worst headlines about trade conflicts.
Policymakers at the US Federal Reserve meanwhile warned of higher inflation and slower growth ahead due to Trump’s tariff policy.
