NO ‘PAIN,’ NO ECONOMY GAIN: PREZ
Sounds tariff-ic: Don takes long view in China tension
President Trump acknowledged Friday that US markets could face “pain’’ from his escalating trade beefs with China and other countries, but insisted that Americans would eventually fare better economically because of his hard-line policies.
“I’m not saying there won’t be a little pain,” Trump said Friday on WABC Radio’s “Bernie & Sid’’ program, hosted by former Don Imus sidekicks Bernard McGuirk and Sid Rosenberg, who lavishly praised the president during their nineminute chat.
“So we might lose a little of it, but we’re going to have a much stronger country when we’re finished, and that’s what I’m all about,’’ Trump added.
Trump on Thursday said the US would consider tariffs on another $100 billion in Chinese imports, which, along with a weaker-thanexpected jobs report, sent US stocks tumbling.
The Dow closed down 572 points Friday, after falling by more than 750 earlier in the session. It has lost more than 2,600 points since it peaked at 26,616 on Jan. 26.
In response to Trump’s new tariff proposal, China said it would counter American protectionism “at any cost,” as a war of words over the tariffs escalated.
“The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” China’s Commerce Ministry said in a statement on its Web site Friday.
Ministry spokesman Gao Feng took the threat a step further.
“China is fully prepared to hit back forcefully and without hesitation,” he said. “We feel America is very arrogant. They have taken a wrong action. The result is that they will hurt themselves. If they release the list of $100 billion tariffs, China is prepared.”
The blunt warning came as Beijing was looking for support from the European Union and Russia over the confrontation, and a former senior Chinese official said services could be next in China’s firing line.
“China needs to have some countermeasures ready if the trade skirmish drags on,” former Vice Minister of Commerce Wei Jianguo told The South China Morning Post.
“China wants the US to go back to the negotiation table and wants to be treated on an equal basis,” he said.
Domestic service exports to China have been on the rise, with the US reporting a $38 billion services-trade surplus in 2016, up from $16.5 billion in 2011.
Capital Economics senior China economist Julian Evans-Prichard told the paper that China could end its services trade with the US or increase the regulatory burden for American firms doing business in China.
“China also imports quite a lot in terms of services — education and tourism, so it could certainly weaponize those,” he said.
The White House sent mixed messages on the dispute Friday.
Economic advisor Larry Kudlow — who said he only found out about Trump’s new tariff threats Thursday night — spoke to reporters on Capitol Hill to try to calm concerns.
“We are not in a trade war,” he said. “What this is is an attempt to right some of the wrongs with respect to China. Blame China, don’t blame Trump.
“I’m not a tariff guy, but sometimes you need to use tariffs to bring people to their senses,” he added, calling China’s refusal to negotiate so far “highly unsatisfactory.”
But Treasury Secretary Steven Mnuchin warned of a trade war.
“I’m cautiously optimistic that we will be able to work this out [but] . . . there is the potential of a trade war,” he told CNBC. “We’re willing to continue negotiations. And on the other hand, the president is absolutely prepared to defend our interests.”
Press secretary Sarah Huckabee Sanders ducked questions about whether Trump’s moves had prompted the Dow to fall, adding that the White House hoped China would agree to talks because Trump would be “the best negotiator at the table.”
Republican lawmakers voiced concern about the president’s policies.
“The president has no actual plan to win right now,” said Ne- braska Sen. Ben Sasse. “He’s threatening to light American agriculture on fire.”
Arizona Sen. John McCain also weighed in.
“It’s easy to punish #China. It’s a lot harder to hold it truly accountable and change its behavior. That requires a real strategy and positive trade agenda, which is why the US should rejoin the #TPP11,” McCain tweeted, referring to the TransPacific Partnership, a multilateral trade deal signed by former President Barack Obama that Trump ordered the US to pull out of.