U.S. President Donald Trump on Friday said he was ready to impose tariffs on all $500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.
Trump had earlier threatened to target up to $550 billion in Chinese products - a figure that exceeds the $524 billion in goods and services China actually shipped to the United States past year.
Trump's threat comes as the trade war with China threatens to go into overdrive.
Bloomberg's headline says Trump "trespass [ed] on Fed's independence".
Trump authorized the tariffs after an investigation he ordered by the U.S. Trade Representative's office found that China was violating intellectual property rules and forcing American companies operating in China to hand over their technology secrets to gain access to the market. He accused Beijing of stealing intellectual property, manipulating the yuan, and exposing illegal export subsidy practices.
China exported goods worth $505.5bn to the U.S. in 2007, compared to $129.9bn of American goods sent to China.
China does not have the wherewithal to match the US on tariffs, but China's central bank is allowing its tightly controlled currency to drift lower against the dollar, a move that could help Chinese exporters cope with USA tariff hikes.
Steady U.S. economic growth of around 2.0 percent in the first quarter of this year and rising interest rates, at a time when the European Central bank and the Bank of Japan are keeping their rates low, helped the U.S. dollar climb to its highest level in a year in July.
St. Louis Federal Reserve Bank President James Bullard said on Friday the Federal Reserve would remain unaffected by Trump's comments on United States monetary policy. "I'm doing this to do this right thing for our country".
Washington also is now targeting another $200 billion in imports which see fresh tariffs imposed as soon as September.
"The escalating trade war, if it goes badly, could be a risk for the USA economy", Bullard said, adding he understands the policy's objective. He also called Jerome Powell, whom Trump nominated to lead the Fed, a "very good man".
Trump has ordered the Commerce Department to investigate whether auto imports pose a threat to US national security that would justify tariffs or other trade restrictions.
"They're picking the wrong customer, I'll tell you that - you know how intense he is on this issue", he said, adding: "Xi seems to think if he waits out the November elections, Trump will be weakened and therefore will lighten the bite".
"So somebody would say, 'Oh, maybe you shouldn't say that as president.' I couldn't care less what they say, because my views haven't changed". Fed officials have penciled in two more hikes this year. When it came to interest rates, Nixon told his advisers "we'll take inflation if necessary, but we can't take unemployment".
The rate rises, which make borrowing more expensive, are meant to head off uncontrolled price rises as the United States economy expands.
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