Trump orders U.S. companies to find an alternative to China

Source: Politico | August 23, 2019 | Caitlin Oprysko

The tweets captured the president’s frustration as his escalating trade war with China heightens the risk of a recession in an election year.

President Donald Trump on Friday used a tweet to order U.S. companies to find an alternative to doing business with China, as he lashed out at Beijing’s latest round of retaliatory tariffs and pledged to respond to them later in the day.

It was unclear exactly what Trump meant with the order or how much force it has, but the tweets captured the president’s frustration as his escalating trade war with China weighs on the economy and heightens the risk of a recession during an election year.

“Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue,” Trump wrote. “I won’t let that happen! We don’t need China and, frankly, would be far better off without them.”

He continued, “The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States.”

China on Friday announced a fresh round of tariffs on $75 billion in U.S. goods, threatening to exacerbate anxieties about a languishing global economy. The tariffs will range from 5 to 10 percent, Beijing said, and will go into effect in waves beginning Sept. 1 and Dec. 15.

China’s state-run news agency Xinhua quoted the country’s tariff commission Friday, which said the penalties were in response to levies threatened by the U.S. on $300 billion worth of Chinese goods.

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The announcement from China was shortly followed by a speech from Federal Reserve Chairman Jerome Powell in which he said the central bank stands ready to do what is necessary to support the record-long U.S. economic expansion. But he did not signal that significant interest rate cuts will be coming soon, angering Trump.

“As usual, the Fed did NOTHING! It is incredible that they can ‘speak’ without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work ‘brilliantly’ with both, and the U.S. will do great,” Trump tweeted.

He then launched a personal attack on Powell, writing, “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”

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    I don’t have an online subscription, but the Washington Post had an article that said Trump can only force businesses to discontinue deals with China if there is a declaration of a national emergency. If he does so, congress has the power to nix the national emergency, thereby also overturning the executive order.

    I think most businesses, if forced to give up China, will just go elsewhere — except the US. I understand Vietnam has been mentioned as welcoming to American business. In any event, those American jobs Trump has promised will return as a result of his trade war just aren’t going to happen. Already I’m hearing of layoffs in existing US facilities such as two US Steel plants in Michigan and India, directly relating to Trump’s trade war. Trump is lying to the American people. And when the jobs go away, the pensions and retirement nest eggs swirl the bowl, prices rise and all the other devastating effects to our economy materialize, Trump’s chances for re-election will be doomed.

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