Tags: China | Trump Administration | ken langone | trump | china. tariffs

Ken Langone: Trump's China Tariffs 'Got Teeth'

(Richard DrewAP)

By    |   Thursday, 16 May 2019 10:34 AM

Billionaire businessman Ken Langone said President Donald Trump is “doing the right thing” by increasing tariffs on China.

 “It’s got teeth,” the co-founder of Home Depot told CNBC.

“The only way you’re going to get somebody to a table for negotiations is when they have something to lose,” said Langone, also the founder of investment bank Invemed Associates.

Trump increased tariffs on $200 billion worth of Chinese imports to 25% from 10% last week, Reuters reported. The move is widely expected to raise prices on thousands of products including clothing, furniture and electronics. China retaliated on Monday, though on a smaller scale.

Langone also praised U.S. Trade Representative Robert Lighthizer’s hard line approach in negotiations with China. “I give Trump a lot of credit for backing him up,” Langone explained.

Langone did admit that long-term tariffs are bad for business. “God forbid if this is a permanent thing,” he said.

But for now, Langone expects consumers to accept any short-term pain and side with the president’s stragegy against China.

“The American people, deep down in their heart, are going to say, ‘What’s right for America, is right for me.’”

To be sure, Walmart Inc. (WMT) said on Thursday that prices for shoppers will go up due to higher tariffs on imports from China as the world’s largest retailer reported its best comparable sales growth for the first quarter in nine years.

Walmart Chief Financial Officer Brett Biggs told Reuters that higher tariffs will result in increased prices for consumers. He said the company will seek to ease the pain, in part by trying to obtain products from different countries and by working with suppliers’ “costs structures to manage higher tariffs.”

Moody’s analyst Charlie O’Shea said the potential impact on Walmart and its shoppers (from tariffs) is limited by its food business. Its grocery operation, which includes fresh food, contributes roughly 56 percent to overall revenue.

Meanwhile, the U.S. House of Representatives Intelligence Committee launched on Thursday a “deep dive” focus on China this year and next, one of several moves by U.S. lawmakers focusing on what they see as troublesome activities by Beijing.

The committee held a hearing with outside experts looking at what members described as China’s use of technology for surveillance, influence and political control domestically and the use of Chinese technology for such purposes internationally, Reuters explained.

The hearing took place a day after Trump’s administration put telecommunications equipment giant Huawei on a blacklist and said it would take steps to protect U.S. companies, a further test of relations as the economic heavyweights clash over trade.

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Billionaire businessman Ken Langone said President Donald Trump is “doing the right thing” by increasing tariffs on China.
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Thursday, 16 May 2019 10:34 AM
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