After shaking up the markets with new trade measures against China, which will take effect on November 1, US President Donald Trump made new statements today that will reduce tensions.
Trump said, “I think we will make a strong trade agreement with China,” adding, “We will have a meeting with Xi in South Korea, and we will also discuss the Taiwan issue.”
President Trump also stated that China has paid a lot of money through tariffs imposed on the United States and that “China has been treating the United States with respect.”
President Trump also argued that the economic pressure being applied was effective, saying, “China will come to the table regarding tariffs.” He added, “China will also come to the table regarding rare earths.”
“If China doesn’t trade with us, they’ll be in big trouble,” Trump said, adding, “I want them to restart soybean purchases from China.”
Trump also stated, “We are far ahead of China in artificial intelligence, and we are also ahead militarily,” adding, “We are catching up with China in shipbuilding.” Trump added, “We can also threaten China on other issues, including aircraft.”
Trump stated that the diplomatic channel is open, saying, “I love my relationship with Xi. I have been invited to go to China and I plan to visit China early next year.”
The Trump administration announced that the historic first tariffs implemented last month had generated approximately $200 billion in revenue. President Trump stated that a portion of this revenue would be used for military salaries, agricultural subsidies, and social assistance.
However, experts say the White House has very limited authority over the use of these revenues. Under US law, federal revenues are transferred to the Treasury, and Congress decides how to spend them.
While the Trump administration has previously exercised executive authority over the use of funds approved by Congress, there are legal obstacles to the free use of revenue from tariffs.
*This is not investment advice.
