President Donald Trump on Sunday defended his strategy versus China, on whose goods Washington has imposed heavy tariffs as the two nations are engaged in high-stakes trade talks, and he called the US economy “the best in the world.”
“Our economy is the best in the world, by far. Lowest unemployment ever within almost all categories,” wrote Trump on his Twitter account, the Efe news reported.
The US economy is “Poised for big growth after trade deals are completed. Import prices down,” the president added in the same tweet, going on to claim that “China eating Tariffs. Helping targeted Farmers from big Tariff money coming in. Great future for USA!”
In another Twitter post, the President alluded directly to his administration’s policy toward the Asian giant, saying “We are doing very well with China, and talking!”
On August 1, Trump threatened to slap 10 per cent tariffs on an additional $300 billion worth of Chinese exports to the US that are still not weighed down with the tariffs the US imposed previously. The new tariffs were slated to go into effect on September 1, a threat that intensified the trade war between the two economic powerhouses, since the new tariffs would have meant that all China’s products would be subject to significant import duties when entering the US.
However, Trump later postponed the measure, saying that the new tariffs would not go into effect until December 15.
Analysts interpreted the postponement as an attempt by the administration to avoid impacting US consumers, mainly during the Christmas buying season, what appeared to be a tacit acknowledgement that American shoppers are the ones being asked to, in effect, foot the bill for the tariffs.
However, on Sunday, Trump’s main economic adviser – Larry Kudlow – and Peter Navarro, the main trade adviser to the White House, defended the strength of the US economy and denied that the tariffs imposed on China to date are hitting US consumers.
Kudlow told Fox News that he sees no chance of a US recession, this after Wall Street reacted last Wednesday with an 800-point plunge after a key potential recession harbinger emerged in the bond market.
On Wednesday, the yield for the 10-year Treasury Bond – a reference instrument for mortgage loans – briefly dipped below the yield for the 2-year bond, thus creating an “inverted yield curve,” a circumstance that has preceded several past recessions and which has not been seen in the market since 2005, and that situation led to a big stock selloff across the board.
Meanwhile, Navarro said in remarks that the tariffs are “not hurting anybody here” in the US.
“You put on 10 per cent tariffs on $200 billion. And China devalues its currency by 12 per cent. Are consumers bearing anything on that? No. We have seen absolutely no evidence in the price data. It’s not showing up in the consumer price index,” Navarro asserted.
Although Trump, his advisers and other supporters have claimed that the tariffs are being fully born by China, other economic analysts and opponents of the President say that tariffs always operate like a “tax” on the US consumer and, in fact, it is the consumer – and not China – who is being tasked with fully paying the increased costs for Chinese goods.