State governors delve into foreign diplomacy on trade war

State governors delve into foreign diplomacy on trade war

In a related tweet, the president also kept the heat on the Federal Reserve.

Trump also doesn't mind voicing his concerns about global trade, particularly when he feels the playing field isn't level for USA exporters.

Still, new tariffs could help Trump's Republican party going into November's congressional elections.

China's yuan continued its steady decline on Friday, defying US President Donald Trump's warning over the dollar's rise and providing Beijing with a buffer against punitive trade tariffs imposed by Washington.

"I'm ready to go to 500", the president declared in an interview with CNBC's Joe Kernen. His follow-up comments this afternoon have accelerated this decline as traders chose to take profits on their U.S. dollar long positions ahead of the weekend.

In the past two days - since Trump said in an interview with CNBC on Friday that he was ready to take a more aggressive approach by imposing tariffs on US$500 billion worth of Chinese products - neither the Chinese commerce ministry nor the foreign ministry has issued any statements. The figure is roughly double the value of Chinese products on which Trump has already imposed or threatened to impose tariffs-and almost equal to the total value of goods and services America purchased from China a year ago.

Philip Levy, a trade expert at the Chicago Council on Global Affairs and a former White House trade adviser, suggested that Chinese officials have been frustrated and confused by their previous failed efforts to reach an agreement.

According to USA data, China imported only US$130 billion of United States goods, meaning that Beijing would eventually have to resort to non-tariff measures. A manager at Qiwang Textile Product Wu Yuepei said, "Usually the goods only take 10 days to reach U.S. customers".

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Since that point, Trump has opened up trade battles on a series of fronts, and the U.S. and other countries around the world have slapped tariffs on $85 billion worth of goods.

However, China's yuan largely continued its steady decline against the United States dollar, providing Beijing with a buffer against the punitive tariffs as the Shanghai Composite on Friday rose 56.73 points, or 2 percent, to 2,829.27, but shed 0.1 percent from a close of 2,831.18 a week earlier.

A slump in risk assets caused by the decline in China's yuan could soon turn to boom should the People's Bank of China shift toward stimulus mode in the world's no. 2 economy, according to Nomura Holdings Inc.

China will likely retaliate if additional tariffs are imposed, economists note, rather than simply knuckle under.

"If there's a toss-up between raising and not raising (rates), you wonder what role these types of comments might possibly play", said Sameer Samana, a strategist for the Wells Fargo Investment Institute.

Along with the "stick" of retaliation, China might also offer the "carrot" of modest concessions. -China trade war and the other conflicts President Trump has ignited.

Here's a breakdown of how we got here and what the tariffs mean for the economy. China's own equity benchmarks have fallen into a bear market. The potentially offsetting comments fueled a two-sided trade in gold prices. "I'd throw a tax on every Mercedes-Benz rolling into this country and on all Japanese products, and we'd have wonderful allies again".

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