August 12, 2019 –The US-China trade war heated up in the first week of August. On August 1, Donald Trump abruptly announced plans to impose a 10 % tariff on the remaining $300 billion of imports from China that he had not already hit with earlier tariffs. The Chinese authorities then allowed their currency, the renminbi (RMB), to fall in value below the highly visible line of 7.0 RMB/$. The US Administration promptly reacted on August 5 by naming China a “currency manipulator” — the first time any country had been given that designation in 25 years. Pundits declared a currency war, while investors responded by immediately sending stock markets down.
August 8, 2019 — I responded to 9 questions in an interview today with Chosun Ilbo. They concern the US-China trade war and the new simultaneous dispute between Korea and Japan.
- The trade war between the world’s two largest economies continues and it appears the war is spilling over to currency now. What do you think are the fundamental reasons for this conflict?
JF It was legitimate for the outside world to ask China to make some changes. But we did not sit down in a responsible manner with China’s leaders to negotiate. The reason for the trade war is that an ignorant and reckless man by chance became president of the United States. He has aggressively raised tariffs against China as well as other trading partners. He has departed from past international commitments, from good economic policy and even from basic deal-making tactics.
August 5, 2019 — The China’s People’s Daily in an interview had three questions about the US threat of August 1 to apply tariffs on the remainder of Chinese goods.
- As the tariff list of Trump now covers all the goods from China, economists are warning that consumers will pay more for the tariff. Do you share this concern?
Yes, the additional tariffs — 10% on the remaining $ 300 billion of imports from China — will clearly raise the price that American consumers have to pay for many items. This is one reason I am concerned.
2. It seems the trade war between the two countries will not end soon. Do you see any evidence that it’s having more impact on global economy?