Larry Kudlow to China: Don't Underestimate Trump

China on Friday said it would impose retaliatory tariffs on about $60 billion worth of USA goods if the Trump administration continued to escalate a trade war between the two countries.

The Finance Ministry accused the Trump administration of damaging the global economy after it proposed increasing duties on $200 billion of Chinese goods in the second round of a dispute over technology. China said at the time blackmail would not work and that it would hit back. After the earlier action against $34 billion of USA goods, that left about $120 billion available for retaliation. China responded with tariffs on $34 billion in US goods, including a wide range of agricultural products. Democrats and Republicans have complained that China's ability to sell goods in the United States at a lower cost than US companies has put thousands of American firms out of business, costing manufacturing jobs and hurting the usa economy.

The move was meant to bring China back to the negotiating table for talks over USA demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit.

The Chinese commerce ministry blamed the United States for escalating the situation. "China has to take necessary counter-measures to defend the country's dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries in the world".

"They better not underestimate the president", White House National Economic Council Director Larry Kudlow said in an interview on Fox Business Network.

"I can imagine [Chinese officials] just sort of hoping that if they do stand tough, either the U.S. will eventually just decide to settle for some symbolic victory that doesn't really matter or that there will be a shift in American politics", he said.

"The Alaska Gasline Development Corporation (AGDC) believes the current trade tensions between the United States and China will be resolved well in advance of Alaska LNG exports to China", AGDC Communications Manager Jesse Carlstrom wrote in a statement to Channel 2. China's trading partners complain those might violate its market-opening pledges by subsidizing or shielding Chinese companies from competition.

The United States and China trade goods and services worth about $650 billion each year, the largest trading relationship in the world between two countries.

Washington imposed 25 percent duties on $34 billion of Chinese goods on July 6.

China's imports from the United States previous year totaled $153.9 billion. "My team and I will continue our work with the Trump Administration to ensure that Chinese and USA officials strike a fair compromise so that Alaska's natural gas reaches the market".

"I might think the $60 billion is a weak response to our $200 (billion)", Kudlow said dismissively, while admitting that "there is a lot they can do to damage our companies in China".

  • David Armstrong