Donald Trump doubles down on China trade strategy

US president insists eventual gains from elusive trade deal will offset short-term pain and stock market losses

‘Our problem is not China,’ Trump declares as he hammers Federal Reserve again for not doing more to cut interest rates

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US President Donald Trump speaks to the media on the South Lawn of the White House on Wednesday. Photo: AP

Published: 3:21am, 8 Aug 2019Updated: 4:39am, 8 Aug 2019

This story is published in a content partnership with POLITICO. It was originally reported by Doug Palmer on politico.com on August 7, 2019.

US President Donald Trump defended his confrontational stance in trade negotiations with China, insisting the eventual gains from an elusive agreement with the world’s second-largest economy will offset any short-term pain and stock market losses.

“I think the market reaction is anticipated,” Trump told reporters on Wednesday before departing on a trip to two American cities scarred in recent days by gun violence.

“I would have maybe anticipated even more, but ultimately it's going to go much higher than it ever would have gone because China was like an anchor on us, China was killing us with [an] unfair trade deal.”

Trump’s decision last week to impose a 10 per cent tariff on another US$300 billion worth of Chinese goods beginning September 1 has whipsawed stocks in recent days. Major indices fell 3 per cent on Monday, the biggest drop for 2019.

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