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Tariffs working in trade war with China, says Trump
PRESIDENT Donald Trump defended his use of tariffs that have inflamed tensions with China and Europe, telling an audience of diehard supporters on Saturday that playing hardball on trade is "my thing". "We have really rebuilt China, and it's time that we rebuild our own country now," Mr Trump said on Saturday during about an hour of free-wheeling remarks at a rally outside Columbus, Ohio.
He added that Chinese stocks are down, weakening that nation's bargaining power in the escalating trade war. Hours before the rally, Mr Trump posted a string of tweets on the issue, saying the US market is "stronger than ever", while the Chinese market "has dropped 27 per cent in last four months, and they are talking to us".
It was unclear which measure of Chinese stocks Mr Trump was referring to. The US S&P 500 index, a broad measure of major US companies, has yet to regain highs made in January, just before the escalation of trade tensions initiated by the US. "Tariffs are working far better than anyone ever anticipated" and would make the US "much richer than it is today", the president tweeted. At the rally, Mr Trump added that the Europeans are "dying to make a deal".
The Twitter posts came one day after China vowed to impose steep tariffs on US$60 billion in US exports in retaliation to large tariffs that Mr Trump is considering on US$200 billion in Chinese exports.
After weeks of half-measure negotiations between the two countries, talks have broken down and now both the White House and Beijing are locked in a rapid escalation of trade threats that experts have predicted could damage both economies. Neither side is showing any sign of backing down.
Mr Trump's senior advisers, particularly White House National Economic Council Director Larry Kudlow and Treasury Secretary Steven Mnuchin, have said the White House's ultimate goal is to remove tariffs and trade barriers in a way that makes "free and fair trade", but Mr Trump's message on Saturday evening was one of protectionism and economic restrictions, not open markets. And he said this approach has paid huge dividends, reviving the American steel industry and bringing manufacturing jobs to the US. Mr Trump suggested that his use of tariffs has directly damaged the Chinese economy, something that he said would continue unless they agreed to his demands, which includes allowing more US exports and investments. But as is common with his Twitter posts, some of his claims were either unproven or incorrect.
For example, he claimed that China was financing advertisements to convince Americans to stop Mr Trump's trade agenda. "China, which is for the first time doing poorly against us, is spending a fortune on ads and PR trying to convince and scare our politicians to fight me on Tariffs - because they are really hurting their economy," he wrote on Twitter. "Likewise other countries. We are Winning, but must be strong!"
There is no evidence that the Chinese government is financing an advertising campaign in the US to convince US politicians that Trump's approach is wrong. US business and farm groups, which do extensive business with China, have complained for months about Mr Trump's strategy, but there are no signs that the Chinese government is paying for a campaign in the US. Likewise, another of Mr Trump's tweets claimed that foreign countries are paying the tariffs he has imposed on steel, aluminium and a variety of products being shipped from China.
"We are using them to negotiate fair trade deals and, if countries are still unwilling to negotiate, they will pay us vast sums of money in the form of Tariffs," he wrote. "We win either way." WP, BLOOMBERG