Aug 23, 2019

The tweets of August

Illustration: Sarah Grillo/Axios

President Trump may not intend to launch the 2nd Cold War, but his tweets on Friday laid out one path to get there.

Why it matters: The president is using Twitter to demand a conscious uncoupling of the world's two largest economies.

Trump's tweets, sent after China announced retaliatory tariffs on $75 billion in U.S. goods:

  • "Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA."
  • "I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!)"
  • "Starting on October 1st, 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%..."

Reality check: Presidents don't get to order companies to come home.

Between the lines: Earlier on Friday, Fed chair Jay Powell warned that "trade policy uncertainty" is a driving factor for the market's fears.

  • Trump's response: "My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?"

Behind the scenes: Trump recently told advisers that he would be perfectly happy if the U.S. did no trade whatsoever with China, according to Axios' Jonathan Swan.

  • In late 2017, Trump first caught aides off guard when he floated the impossible idea of cutting off all trade with China.

The bottom line: All of this has gone down during a strong economy. Imagine how bad it'd get were things to turn in the other direction.

Go deeper

Trump tells American businesses to leave China

President Trump significantly escalated his trade war rhetoric on Friday with a series of tweets — just two days after tweeting that things were "great with China."

"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA."

The bottom line: It should go without saying that Trump doesn't have the authority to order U.S. companies to look for alternatives to China.

Go deeper: China announces retaliatory tariffs on $75 billion of U.S. goods

Keep ReadingArrowAug 23, 2019

Trump escalates tariffs on hundreds of billions of dollars worth of Chinese imports

President Trump said he would raise tariffs against China on Friday in the aftermath of China's newly announced tariffs and a steep stock market drop.

What's happening: Trump said on Friday that $250 billion worth of goods and products from China would be taxed at 30% instead of 25%, starting Oct. 1, and the remaining $300 billion worth of goods will be taxed at 15%, instead of 10%.

Go deeperArrowAug 23, 2019

Trump delays tariff increases on Chinese goods ahead of trade talks

Photo: Thomas Peter-Pool/Getty Images

President Trump announced on Twitter Wednesday he would delay the increase on existing tariffs on $250 billion worth of Chinese goods ahead of the U.S. resuming trade talks with China.

Why it matters: There's evidence that the U.S.-China trade war has hurt both of the world's 2 leading economies. It's dented consumer sentiment and a survey of members of the American Chamber of Commerce in Shanghai released Wednesday found 51% said U.S. and Chinese tariffs had a negative effect on revenue.

Go deeperArrowSep 11, 2019