The White House asserted Friday that it has the upper hand in its economic fight with China, arguing that the country’s economy is “crumbling” due to the trade barrier the administration had erected against it. The comments came in response to China’s latest move to escalate the trade fight between the two countries by promising to slap tariffs of between 5-25 percent on $60 billion worth of U.S goods.
White House Economic adviser Larry Kudlow said China’s announcement “was a much lower number than we had been looking at” and therefore not really a “tit-for-tat response,” given that the White House had proposed larger tariffs. The reason China’s retaliation threat was not stronger was that the Chinese economy was suffering, he argued.
“The Chinese economy is slipping across the board,” Kudlow said. “That is one reason their currency is falling. It is not the only one. People are taking money out of China. They are trying to pump up the money supply again. They are not in good economic shape.” Asked if China was about to blink, Kudlow said he didn’t know but added that the president was determined to follow through on his policy.
Kudlow repeated the point in an interview with Bloomberg, saying. ““Their economy’s weak, their currency is weak, people are leaving the country. Don’t underestimate President Trump’s determination to follow through.”
The 25 percent tariff on $200 billion worth of Chinese goods the administration announced earlier this week would be on top of 25 percent tariffs on another $34 billion in goods already enacted and 25 percent tariffs on steel and 10 percent on aluminum, both primarily directed at China.
China’s Ministry of Commerce called its proposed tariffs “rational and restrained,” adding that the implementation date will be “subject to the actions of the U.S., and China reserves the right to continue introducing other countermeasures.”
