US President Donald Trump said that Washington would increase tariffs on China in case the first step of a broader agreement is not reached.
“If we don’t make a deal, we’re going to substantially raise those tariffs,” he said on Tuesday in a speech to the Economic Club of New York. “They’re going to be raised very substantially. And that’s going to be true for other countries that mistreat us, too.”
China is “dying” to make a trade deal with the US, Trump said, adding that he would only sign it if it is good for US firms and workers.
Still, “we’re close — a significant phase one deal could happen, could happen soon,” he said.
Shanghai stocks yesterday closed at their lowest since Sept. 30, while the yuan was weaker against the US dollar.
Other Asian markets also declined, with Hong Kong’s benchmark declining 1.8 percent as the territory faced heightened tensions.
Trump reiterated complaints about China’s ascendance in the global economy.
“Nobody’s cheated better than China,” he said. “The theft of American jobs and American wealth is over.”
US stocks have rallied to records in recent days partly on optimism that tensions are cooling in an 18-month dispute involving tariffs on about US$500 billion in trade between the world’s two largest economies. The S&P 500 Index was up about 0.3 percent as Trump delivered his remarks.
The economic stakes of a prolonged trade dispute are rising for both countries.
Chinese exports and imports continued to contract last month, though slightly less than forecast by economists. The nation’s trade surplus with the US widened in the month to US$26.4 billion — heading in the opposite direction from the narrowing that Trump has called for to balance the countries’ trade relationship.
Trump also renewed his assault against the US Federal Reserve, saying it was hurting the US by not copying other central banks in deploying negative interest rates.
“We are actively competing with nations who openly cut interest rates, so now many actually getting paid when they pay off their loan, known as negative interest,” Trump said.
“Give me some of that money. I want some of that money. Our Federal Reserve doesn’t let us do it,” Trump said, drawing a laugh from the audience. “It puts us at a competitive disadvantage to other countries.”
The Fed cut interest rates last month for the third time this year to shield the economy from uncertainty over trade and weaker global growth, while signaling that policy is now on hold unless the outlook worsens.
The Fed’s benchmark rate now lies in a target range of 1.5 to 1.75 percent, which is low by historic standards, but higher than Japan and the eurozone, which have shifted to negative rates in an effort to lift moribund economies.
“We’re paying actually high interest. We should be paying by far the lowest interest,” Trump said.
Noting the gains on US stock markets during his presidency, he said they could have risen a further 25 percent “if we had a Fed that worked with us.”
The president has persistently sought to shift blame for slowing US economic growth onto the Fed and away from his trade conflicts with China, which some businesses say has prompted them to delay investment decisions.
US manufacturing has slumped, but consumers remain resilient and employers continue to hire new workers at a solid pace.
Fed Chairman Jerome Powell was scheduled to testify before Congress yesterday and today.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a