Amid trade war, Trump calls China’s Xi ‘enemy’

Markets react with slide before G7 weekend meet

U.S. President Donald Trump on Friday lashed out personally at Chinese President Xi Jinping, calling him an “enemy,” in a dramatic escalation of rhetoric that could signal a deeper shift in his administration’s increasingly confrontational strategy toward China.

Despite the rising tensions on trade, Trump had sought to maintain good personal relations with Xi, repeatedly calling him a “good friend” and praising his leadership. He has even refrained from criticizing Xi over China’s handling of massive pro-democracy demonstrations in Hong Kong that Beijing has blamed on U.S. influence.

But Trump dropped all pretense Friday in series of tweets in which he directed American companies to ditch China and declared that the United States “would be far better off” without dealing with the world’s second-largest economy. The president’s frustration over a lack of progress on trade talks with Beijing and signs of weakness in the U.S. economy boiled over as he attacked both Xi and the Federal Reserve chair, Jerome Powell, asking in another tweet “who is our bigger enemy” between the two.

The president’s comments, following news Friday that China would slap new tariffs on about $75 billion in U.S. products, deepened a conflict over trade and technology that threatens to tip a weakening global economy into recession. The White House offered no further details or explanation of Trump’s intentions.

The rising tensions unnerved investors already on edge, as leaders of the Group of 7 major economies prepare to meet in France this weekend. The Dow Jones Industrial Average dropped 623 points Friday as companies and business groups large and small joined in a chorus of opposition.

The broad sell-off sent the S&P 500 to its fourth straight weekly loss.

“There doesn’t seem to be a floor under the spiraling down of the relationship, and world markets are reacting negatively to a business climate beset by uncertainty and risk,” said Douglas Barry, a spokesperson for the U.S.-China Business Council. “It’s unclear what the strategy is or if there is a strategy.”

Even Trump allies who have cheered his showdown with Beijing are saying that the president’s statements may foreshadow a possible sharper break between the two countries.

“It’s a striking departure for American policy on China; it’s even a striking departure from Trump’s policies and comments on China of just a few weeks ago,” said Gordon Chang, an author and frequent Fox News commentator who espouses hawkish views on China.

“Trump is capable of a head fake, but I do not get a sense this is a head fake,” Chang added.

“This is incredible language. The word ‘enemy’ really takes this to a new level,” said Bonnie Glaser, a China expert at the Center for Strategic and International Studies. “The Chinese will be quite startled by the fact that the president could even raise the fact that China could be an enemy.”