World_news Kudlow does not expect China to retaliate against Trump’s latest tariffs despite Beijing’s warning – CNBC


Larry Kudlow, director of the U.S. National Economic Council, speaks during a Bloomberg Television interview outside the White House in Washington, D.C., U.S., on Friday, Aug. 2, 2019.

Andrew Harrer | Bloomberg | Getty Images

White House economic adviser Larry Kudlow said on Sunday that he doesn’t believe China will retaliate against additional tariffs on Chinese imports that President Donald Trump announced Friday.

Asked on CBS’ “Face the Nation” if he expects retaliation from China, Kudlow said: “I do not. I think his was an action to respond to their action. So I doubt whether they’re going to take another step. I have not heard their official response yet. We’ll have to wait and see.”

Trump said the U.S. will raise existing tariffs on $250 billion of Chinese goods to 30% from 25% on Oct. 1. He is also raising tariffs on the remaining $300 billion of Chinese imports to 15% from 10%. Those tariffs will go into effect in two phases on Sept. 1 and Dec. 15.

The president’s decision was in response to China’s announcement on Friday that it will impose tariffs on $75 billion of U.S. imports and will reapply auto tariffs that were suspended last December.

Despite Kudlow’s expectations, China said Saturday that it strongly opposes Trump’s decision to levy additional tariffs on $550 billion worth of Chinese goods, and warned the U.S. of consequences if it does not end its “wrong actions.”

“Such unilateral and bullying trade protectionism and maximum pressure violates the consensus reached by head of China and United States, violates the principle of mutual respect and mutual benefit, and seriously damages the multilateral trade system and the normal international trade order,” China’s commerce ministry said.

“China strongly urges the United States not to misjudge the situation or underestimate determination of the Chinese people,” the ministry added.

Trump has also asserted that he has authority to force U.S. businesses to leave China, citing the International Emergency Economic Powers Act of 1977, a national security law which has been used to allow a president to target terrorists and pariah states.

Kudlow said that the president does have the authority to block private businesses from investing in China, but that “he is not intending to right now. That is not his intention.”

Trump also said Sunday that he could declare the trade war with China as a national emergency if he wanted to.

“In many ways this is an emergency,” Trump said at the G-7 leaders meeting. “I could declare a national emergency, I think when they steal and take out and intellectual property theft anywhere from $300 billion to $500 billion a year and when we have a total lost of almost a trillion dollars a year for many years.”

The president added that he has no plan right now to call for a national emergency.

Treasury Secretary Steven Mnuchin also said Trump does have the authority to order companies to cease business with China “if he declared an emergency.” Mnuchin said the president is not backing down from plans to raise tariffs on Chinese goods, despite the president’s comments earlier on Sunday that he had “second thoughts.”

“The president is determined to have fair and reciprocal trade with China,” Mnuchin said in an interview on “Fox News Sunday.”

“This morning’s comments weren’t meant to back that off. It was meant to say he is as determined as ever on this issue. He wants a good deal.”

Read More