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Trump defends stance on China trade after new tariffs, says 'things are going well'

File photo: US President Donald Trump. Photograph:( Reuters )

Reuters Washington, United States Aug 03, 2019, 09.57 PM (IST)

US President Donald Trump said on Saturday that things are going well with China, insisting US consumers are not paying for import taxes he has imposed on goods from that country although economists say Americans are footing the bill.

"Things are going along very well with China. They are paying us Tens of Billions of Dollars, made possible by their monetary devaluations and pumping in massive amounts of cash to keep their system going. So far our consumer is paying nothing - and no inflation. No help from Fed!" Trump said on Twitter.

He also said - without presenting evidence - that countries are asking to negotiate "REAL trade deals," saying on Twitter, "They don't want to be targeted for Tariffs by the US"

Trump abruptly decided on Thursday to slap 10 per cent tariffs $300 billion in Chinese imports, stunning financial markets and ending a month-long trade truce.

China vowed on Friday to fight back.

China's new ambassador to the United Nations, Zhang Jun, said Beijing would take "necessary countermeasures" to protect its rights and bluntly described Trump's move as "an irrational, irresponsible act."

"China's position is very clear that if US wishes to talk, then we will talk, if they want to fight, then we will fight," Zhang told reporters in New York, also signalling that trade tensions could hurt cooperation between the countries on dealing with North Korea.

Trump said China had to do a lot in order to turn things around in the trade talks and repeated an earlier threat to substantially increase tariffs if they failed to do so.

"We can't just go and make an even deal with China. We have to go and make a better deal with China," Trump told reporters at the White House.

Tariffs are intended to make foreign goods more expensive to boost domestic producers unless international exporters reduce prices. But there has been no evidence that China is cutting prices to accommodate Trump's tariffs.

A study published by the National Bureau of Economic Research in March found that all of the cost of tariffs imposed in 2018 was passed on to US consumers.

Story highlights

Trump abruptly decided on Thursday to slap 10 per cent tariffs $300 billion in Chinese imports, stunning financial markets and ending a month-long trade truce.