The U.S.-China trade war escalated further Thursday after China's government stated it will take all "necessary counter-measures" in reaction to the new round of tariffs announced by U.S. President Donald Trump's administration.
China Ready To 'Escalate'
China's Customs Tariff Commission of the State Council said in an online post the government feels "severely violated" by Trump's tariff escalation as it is not consistent with an agreement reached during the G-20 summit, CNBC wrote. China hopes the U.S. will meet "half-way" to reach a "mutually acceptable solutions through dialogue on the basis of equality and mutual respect."
Trump To Xi: Let's Meet
Trump wrote in a Tweet Wednesday China President Xi Jinping is a "great leader who very much has the respect of his people." He followed up that his Chinese counterpart likely wants to "quickly and humanely" reach a solution to the escalation of tensions and riots in Hong Kong.
Trump concluded with likely what could be seen as a personal message to Jinping: "Personal meeting?"
I know President Xi of China very well. He is a great leader who very much has the respect of his people. He is also a good man in a “tough business.” I have ZERO doubt that if President Xi wants to quickly and humanely solve the Hong Kong problem, he can do it. Personal meeting?
— Donald J. Trump (@realDonaldTrump) August 14, 2019
Analyst: Trump Is 'Dead Wrong'
Trump wrote in a separate Tweet the U.S. is "winning, big" against China and prices to consumers "have not gone up, and in some cases, have come down." According to chief economist at Moody's Analytics Mark Zandi, Trump is simply "dead wrong."
..Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve. Germany, and many others, are playing the game! CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!
— Donald J. Trump (@realDonaldTrump) August 14, 2019
Zandi said during a CNBC "Squawk Box" interview Thursday morning the combined cost to American businesses and consumers in the coming years from all of Trump's existing tariff threats stands at $100 billion, or half a percent of GDP.
"It's starting to show up in places like manufacturing, transportation, distribution," he said. "If it metastasizes, and other businesses and other sectors of the economy start to pull back on hiring and unemployment starts to rise, well that's recession."
The President may come to the same conclusion and conclude a trade war "isn't working" as expected, he said. But then the U.S. will be in a position of weakness as it needs to reach a "face-saving" resolution.
"The question is, will (Chinese) President Xi (Jinping) give him the way out? " Zandi said.
Related Links:
Annual Hearing On China's WTO Compliance Scheduled
Read The Full List Of Proposed 10% Tariffs On Chinese Imports; Some Delayed Until Dec. 15
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