Trump Says "We Don't Need China" then "Orders" Businesses to Find Alternative

-edited

After Beijing announced an additional $75 billion tariffs on the US, Trump demanded US Businesses find alternatives.

We Don't Need China

Trade and currency wars took another huge leap forward just one day after another oft-repeated message that a deal with China is coming.

The Wall Street Journal reports Trump Orders U.S. Businesses to Find Alternative to China.

President Trump said U.S. companies were “hereby ordered” to start looking for alternatives to doing business in China after Beijing said it would impose tariffs on $75 billion worth of additional U.S. products.

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

Mr. Trump’s comments came in response to China’s plan, laid out Friday, to impose tariffs of 5% and 10% on almost all the remaining U.S. imports on which it has yet to impose punitive taxes, including vehicles and car parts, in retaliation against U.S. moves to slap punitive tariffs on an additional $300 billion of Chinese goods.

The president demanded that U.S. companies “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

Items China plans to impose tariffs on include agricultural products, apparel, chemicals and textiles.

Some major car companies will be hit hard by the increase in tariffs, particularly Tesla Inc.and Ford Motor Co., as well as Germany’s BMW AG and Daimler AG ’s Mercedes-Benz. These companies build a significant number of vehicles in the U.S. for export to China—mostly premium models—and a higher tariff could force them to raise prices.

Soon after President Trump announced his plans for fresh tariffs set for Sept. 1, Beijing responded by officially announcing the freezing of purchases of U.S. agricultural products and letting its currency drop to its lowest level in a decade. A weaker yuan makes Chinese exports cheaper.

China Tweetstorm

Wow

Bond yields are tumbling, the DOW is down 500 points, The Yuan is hitting new lows and gold is up $30.

Mike "Mish" Shedlock

Comments (48)
No. 1-22
Augustthegreat
Augustthegreat

Another win for the Chosen One

Realist
Realist

When you believe you are “the chosen one”, I guess you can “order” anything you wish: Trump can command the seas to part; he can command every woman he has ever molested to forget it happened; he can order US businesses to follow his wishes; he can declare he is “greatest” at anything he has ever done. Another fine example of why...

He is the worst President ever.

Tony Bennett
Tony Bennett

Well, not much to say at this point ... except ... Got Popcorn?

Webej
Webej

In contrast to the Communist Party which "controls" Chinese businesses, in America private businesses are not told what to do by the government. O wait...

LB412
LB412

This administration does not understand global trade. For example I order $10M of products to be delivered in September. $1M will ship to the USA to be sold to domestic customers. The $9M balance is drop shipped to the rest of the world. The entire $10M in revenue comes to the USA where it funds staffing, rent, profits are taxed, etc. This is highly beneficial to all parties involved.

The supply chain simply cannot be changed to the USA, Vietnam, or elsewhere over the short or midterm. In fact if possible at all it will take many years.

Sechel
Sechel

Mish , We've gone past the point where we can simply debate Trump policies. At this point when he is daily tweeting about being King of the Jews, The Chosen One and Ordering companies to exit China its just time to admit the truth, that Trump touch with Reality. I'll admit he's dangerous to the economy and to the liberties of others but I can no longer debate anything Trump says on merits and give him the benefit of the doubt. We're now in the theater of the absurd.

From Greg Mankiw, ""From the beginning, I was skeptical Donald Trump had what it takes to be an effective president and steward of the economy. His treatment of the Fed and our trading partners has removed any doubt about that judgment."

kurtellis
kurtellis

The problem with dementia is that it gets progressively worse. I predict that trump will have a very visible mental breakdown at some point in the next 6 months. I am wondering if he can even complete his first term.

abend237-04
abend237-04

Mommy! Donald and Xi are in the fuel tank playing with matches again!

Bam_Man
Bam_Man

This could get serious.

we_will_be_Ok
we_will_be_Ok

It's all makes sense. When we engaged China economically, it was because of labor arbitrage -- a great disparity in salaries. With time salaries there increased and here decreased (in real terms). Something like that is happening with the economic system -- at least ours is becoming more like theirs...

CautiousObserver
CautiousObserver

If there is one thing about President Trump that everyone knows by now, it is that he make many radical statements that he does not follow through on. We have no choice but to wait and see if any of his recent remarks actually translate to policy.

Meanwhile, the algos react as though each time he says something it is a done deal. It makes me wonder if someone on the inside is making obscene amounts of money on these wild market swings.

JonSellers
JonSellers

I always thought President Trump had a skewed idea of what the actual powers of the Presidency are. They are really designed to be simply to implement the laws passed by Congress and to be the Commander in Chief in war. That's it. I wonder who gets to tell him that he actually can't "hereby order" private businesses to do bumpkus. I would not want to be that guy.

SleemoG
SleemoG

So let it be written, so let it be done.

Jackula
Jackula

My take is the FED is not inclined to risk taking interest rates negative so the Donald is gonna do a trade war to try to blame the Chinese for the ensuing recession.

shamrock
shamrock

What happens if the CEO's don't follow him on twitter? DOW now down 600+.

shamrock
shamrock

Every time I think I can't be shocked by anything he does, he does it again.

abend237-04
abend237-04

Eventually, the path we're on has a fork ahead; One leads to fair and impartial arbitration, the other to war. Having spent over $15 billion at Huawei alone on R&D last year, the Chinese are probably well on their way to discovering the importance of patent protection in world trade. Also: Trade with the west has lifted over 700 million Chinese out of poverty since 1979. We can point to our current $1 Trillion credit card balance, for starters, as evidence of our continuing contribution to that effort. The WTO, or some other mutually agreed binding arbiter, is urgently needed. We need to get the bull and dragon out of the trade China shop now.

Mish
Mish

Editor

"You mean .... Got Gold?"

Gold and popcorn, the winning combo of the day along with the long bond

CzarChasm-Reigns
CzarChasm-Reigns

The Show must go on...and on:

8 min ago From CNN's Nikki Carvajal

President Trump announced a new round of tariffs on China, set to start Oct. 1.

The President tweeted that “the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%.”

“Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%,” Trump wrote.

inonothing
inonothing

Il Duce!

Advancingtime
Advancingtime

Expect the controversy over just how much trade contributes to America's economic growth to be ramped up as growth slows. In many ways, trade should be seen as a way to increase access to a greater variety of goods at a better price but this only works over a long period of time if it is balanced.

The promise that increased trade will create new jobs has turned out to be largely a myth. Much of the "free trade" movement is driven by mega-companies desire for larger markets and greed. The article below explores the role of trade in our economy.

clayton2
clayton2

Did you forget about the shitty economy and interest rates at 22% you ass clown twit!