Trump says he's willing to hit all Chinese imports with tariffs
President Donald Trump said he's ready to hit all goods imported from China with tariffs, sending U.S. markets sliding before the opening bell.
In a taped interview with the business channel CNBC aired early Friday, Trump said "I'm willing to go to 500," referring roughly to the $505.5 billion in goods imported last year from China.
The administration to date has slapped tariffs on $34 billion of Chinese goods in a trade dispute over what it calls the nation's predatory practices.
"I'm not doing this for politics, I'm doing this to do the right thing for our country," Trump said on CNBC. "We have been ripped off by China for a long time."
Asked if he would do it even at a cost of a stock market drop, he said: "If it does it does."
Dow futures, which had already been pointing modestly lower, are now indicating triple-digit losses. World stock markets fell sharply after Mr. Trump's remarks.
The comments come as the U.S. government is also considering taxing auto imports. Critics lined up this week to urge the administration to reject the tariffs, arguing they would raise car prices, squeeze automakers by increasing the cost of imported components and invite retaliation from trading partners — and allies — like the European Union and Canada.
The proposed 25 percent tariff on imported cars and auto parts from Europe and elsewhere could give buyers sticker shock. Consumers could be shelling out nearly $7,000 more per vehicle. The Honda Civic could cost an extra $1,100. The Ford Escape up nearly $1,600 and the Audi Q5 could run nearly $6,000 higher.
After being up slightly earlier in the day, European indexes were trading lower. Germany's DAX fell 0.5 percent to 12,622 while France's CAC 40 dropped 0.7 percent at 5,377. Britain's FTSE 100 fell 0.3 percent to 7,661. U.S. indexes were poised to open lower, with S&P 500 futures down 0.2 percent and Dow futures 0.4 percent lower.
Earlier, before Trump's comments were aired, most Asian markets finished higher. Japan's Nikkei 225 bucked the regional trend, losing 0.3 percent to 22,697.88. South Korea's Kospi added 0.3 percent to 2,289.19. Hong Kong's Hang Seng gained 0.8 percent to 28,224.48. The Shanghai Composite Index rebounded 2.1 percent to 2,829.27. Australia's S&P-ASX 200 increased 0.4 percent to 6,285.90.
The People's Bank of China set the Chinese currency's central parity rate to 0.9 percent weaker against the dollar on Friday. If the yuan continues to depreciate, goods exported to China will become more expensive to consumers there. Chinese exports would also be relatively cheaper, possibly balancing out suggested increases in tariffs by the Trump Administration.
"One theory is that the PBOC is depreciating the yuan because it has not enough ammunition to fight a dollar-for-dollar increase in tariffs. The markets are very risk-off. There is a loss in confidence right now," said Francis Tan, an economist at UOB Bank.