Real-estate mogul Donald Trump is fed up with China’s unfair trading practices, and he’d be happy to see the United States retaliate in kind.
“The Apprentice” show creator lambastes President Barack Obama for saying we want China to succeed. “That statement is absolutely terrible, unthinkable,” Trump tells Fox News.
“Can you imagine Ronald Reagan making that statement? China is succeeding off our money. We’re making so many products in China and then paying China so much money to buy those products.”
As a result, China is building new cities bigger than our own, Trump says.
He notes that our huge trade deficit with China — $27.8 billion in September — stems largely from the artificially low level of the renminbi.
“We’ve fallen into the Chinese trap, and now we’re destroying the dollar to compete with them,” Trump says. “We should keep the dollar strong and should tax Chinese products.”
Trump counts himself a staunch supporter of free trade. “But we don’t have free trade with China. It will literally destroy this country if we don’t get smart quickly. They’ll do it with a smile, and our people will have no idea what’s happening.”
That’s why “I’d love to have a trade war with China,” Trump says. “If we do no business with China, we’ll save a lot of money. We’re losing a fortune to China.”
Of course, he fails to mention that with China standing as the largest foreign holders of Treasury securities and a huge source of cheap imports, we would likely suffer as much as the Chinese from a trade war.
Trump is concerned about the impact of a weaker dollar. The dollar’s weakness will create instability and inflation, he says.
“A loaf of bread is going to cost $20 soon. A candy bar is going to cost $10. Look what’s happening with oil – our lifeblood,” Trump says. “It’s going through the roof. That’s a combination of China and OPEC, which is laughing at us.”
Not everyone sees the dollar-yuan relationship as so dire. The yuan just climbed to its highest level against the dollar in 17 years amid speculation China’s central bank will allow its currency to rise faster.
“International pressure has had a big impact on recent faster gains in the yuan,” Liu Dongliang, a Shenzhen-based analyst at China Merchants Bank, tells Bloomberg. “Regulators are tightening monitoring on hot-money inflow channels, which will pave the way for faster appreciation.”
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