Just as President Donald Trump was preparing to meet world leaders to discuss the global economy and his trade wars, China on Friday announced it would impose tariffs on $75 billion worth of U.S. imports in retaliation for duty hikes the United States pledged to slap on Chinese imports starting next month.
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The announcement also came just before the chairman of the Federal Reserve gave a speech investors and analysts planned to scrutinize for signs of how the central bank would address worries of a slowing economy — and as President Trump sent mixed messages on tax cuts.
Fed chair Jerome Powell suggested Friday that Trump’s trade wars were contributing to a possible global slowdown – and he said they have made it more difficult for the Fed to set policies on interest rates, according to the Associated Press. Powell did not offer any clear signal on further cuts to interest rates, though, during his widely watched remarks in Jackson Hole, Wyo., according to the AP.
Mark Ralston/AFP/Getty Images, FILE
In this May 14, 2019, file photo, shipping containers are unloaded at the Port of Los Angeles in Long Beach, Calif.
Just after Powell spoke, Trump again blasted the Fed — saying in a tweet that it “did NOTHING” — and questioning who was “our bigger enemy” — Powell or China’s President Xi Jinping.
China said that it would impose its new penalties on two batches of goods, on Sep. 1 and Dec. 15, according to the official Chinese news agency Xinhua. It said 5,078 American products would see duty hikes of 5 or 10%, and that on Dec. 15, it would hit “American-made vehicles and auto parts” with tariffs of 5 or 25%, according to Xinhua.
Those dates match with 10% tariff the Trump administration said would go into effect on $300 billion worth of imports from China.
(MORE: As economy flashes warning signs, Trump suggests remedies, then argues they’re not needed)
White House trade adviser Peter Navarro this morning downplayed the move as “well anticipated.”
“When China reacts like this, what they simply do is strengthen the resolve of this president,” Navarro said in an interview with CNN, referring to Trump.
Andrew Caballero-Reynolds/AFP/Getty Images, FILE
In this file photo taken on July 31, 2019, U.S. Federal Reserve Chairman Jerome Powell speaks during a press conference after a Federal Open Market Committee meeting in Washington, D.C.
Trump planned to depart for France later Friday to attend a meeting of the Group of Seven, or G7, major industrialized nations, where the state of the world’s economy will take center stage.
Those nations’ leaders are scheduled to attend a meeting on the global economy on Sunday morning — a session added at the last minute at the United States’ request, according to a senior U.S. administration official.
This week, as the economy flashed warning signs of a possible downturn, the president suggested a variety of remedies — even as he argued they were unnecessary.
He and his senior advisers have tried to stave off consumer concerns about a possible recession — arguing the economy is strong, even as they discuss potential fiscal boosts.
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President Donald Trump speaks to the media before departing from the White House, Aug. 21, 2019, in Washington, DC.
After Trump first said earlier this week he was considering a payroll tax cut, he reversed himself and nixed that idea the next day. He has also floated indexing and a capital gains tax cut.
(MORE: President Donald Trump walks back payroll tax cut suggestion: ‘We don’t need it’)
Then, on Thursday, his top economic adviser, Larry Kudlow, told reporters that the White House was not considering any short term actions to jolt the economy but is developing a long-term “tax cuts 2.0 plan,” possibly to be unveiled during the 2020 campaign.
Trump on Friday morning argued in a tweet that the economy was “strong and good, whereas the rest of the world is not doing so well.”
He has made the economy a central message of his campaign, and he accused the news media and Democrats of wanting a recession in order to tank his reelection chances.