Amid falling markets, President Donald Trump's new economic adviser, Larry Kudlow, says there is no trade war between the US and China. Within 24 hours of President Trump's announcement of significant tariffs on Chinese goods, the Chinese government responded with a retaliatory tariff on over one hundred American goods.
On Friday, the president fired off another tweet attacking China's trade policy: "China, which is a great economic power, is considered a Developing Nation within the World Trade Organization", tweeted the President. He referred to his personal relationship with Chinese President Xi Jinping and said the two men would always be friends, adding, "Great future for both countries!"
President Donald Trump and his allies again assured the country on Sunday morning that they do not expect China to actually implement threatened tariffs that could rock the USA economy and hurt American farmers, especially those who grow soybeans or raise hogs.
The move was a response to years of alleged intellectual property theft by China.
China imports 12.7 million tons of the product a year, of which the US now accounts for only 600,000 tons, Goldman estimates. The U.S.is losing $500 Billion a year, and has been losing Billions of Dollars for decades.
On Tuesday, Washington unveiled some $50bn worth of proposed tariffs on Chinese imports and on Thursday Trump upped the ante, directing United States trade officials to identify tariffs on another $100bn of Chinese imports. The deal which could have been in the tune of $117 billion and was being dubbed as "technology industry's biggest deal ever", got stalled with the United States authorities fearing that the deal would allow Chinese companies like Huawei Technologies become the dominant supplier. This aside, China has said it will also pursue legal action against the U.S. at the WTO.
Trade war? What trade war?
As Trump tweeted, aides hit the Sunday news shows to downplay fears of a trade war with China.
Trump's message came as USA and China are teetering on the brink of trade war and the Chinese side is putting a tough face. "We want fair and reciprocal trade". Larry Kudlow, Trump's new top economic advisor, has expressed interest in negotiating with the Chinese as the tariffs are all still proposals and nothing is official.
About 10 days later, Trump blocked Singapore-based Broadcom's takeover of United States chipmaker.
Meanwhile, the China Chamber of International Commerce said that since the United States tariff announcement its members had reported greater problems with honouring trade contracts and sharp rises in default risks.
On Thursday, US struck the latest blow by imposing fresh tariffs on Chinese imports.
Could services be next in China's sights to defend its interests "at any cost" in a U.S. trade war? The Dow Jones closed 572 points down on Friday, while the tech-heavy Nasdaq was down 2.2 per cent.