August 23, 2019
President Donald Trump on Friday said he was ordering “our great American companies” to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).”
And Trump said that he will respond this afternoon to China’s newest round of tariffs on U.S. goods.
The White House did not immediately respond when asked if the announcement, delivered in a four-part Twitter thread Friday morning, constituted an official order from the president.
It was not immediately clear how, or under what authority, the president could implement these declared orders, or whether he had already done so.
Equities sunk to session lows shortly after Trump’s tweets. The Dow Jones Industrial Average fell more than 435 points, or 1.6%, while the S&P 500 slid 1.7% and the Nasdaq Composite dove 2%.
Trump’s tweets followed another missive against Federal Reserve Chairman Jay Powell, who had just pledged to “act as appropriate” to sustain the U.S. economy amid the “deteriorating” global economic outlook.
In an apparent response, Trump tweeted: “Who is our bigger enemy,” Powell or Chinese President Xi Jinping?
Earlier Friday, China had announced it would slap retaliatory tariffs of 5% and 10% on roughly $75 billion in U.S. imports. The newly announced import taxes represented the latest escalation in the increasingly fraught U.S.-China trade war, as well as a direct response to Trump’s plan to impose duties on $300 billion worth of China’s goods by mid-December.
Top trade advisors Robert Lighthizer and Peter Navarro were reportedly near the Oval Office just before the president sent his latest tweets. A source later told CNBC that Trump was meeting with his trade team Friday.
Trump was scheduled to leave for France on Friday night to participate in the multilateral G7 summit this weekend.
The president had long declared Xi a friend, and had repeatedly said he blames past U.S. leaders, not China, for the unfair trade situation between the two economic superpowers.
Trump held that line even after talks between the two sides’ negotiators broke down in May. “My respect and friendship with President Xi is unlimited,” he said at the time.
But after China’s new round of tariffs, and Powell’s apparently unsatisfying remarks at an annual central bank event in Jackson Hole, Trump’s tune changed.
“As usual, the Fed did NOTHING! It is incredible that they can ‘speak’ without knowing or asking what I am doing, which will be announced shortly,” Trump tweeted.
“I will work ‘brilliantly’ with both” a strong dollar and a weak Fed, Trump assured, before adding: “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”
Trump has ripped Powell relentlessly in recent weeks, as some investors have started to flash concerns that the economy could be headed for a slowdown. He has publicly pressured Powell to lower interest rates by a full percentage point, despite maintaining that the economy is “strong and good.”
In his remarks Friday morning, Powell did not say specifically where he thought rates should go. But he promised that the Fed “will act as appropriate to sustain the expansion,” a phrase he has used several times in the recent past.
Trump continued to rail against China as the busy morning progressed. “Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue,” Trump said.
“I won’t let that happen!” Trump wrote. “We don’t need China and, frankly, would be far better off without them.”
After claiming he was ordering U.S. firms to look for alternatives to China, Trump added, “I will be responding to China’s Tariffs this afternoon.”
The U.S. has already slapped 25% tariffs on $250 billion worth of Chinese imports. In early August, Trump announced he would impose 10% tariffs on the rest of the Chinese imports to the U.S., roughly $300 billion worth of goods, by Sept. 1.
Trump later delayed some of those tariffs until Dec. 15, saying he didn’t want to hurt U.S. consumers during the holiday shopping season.
China has hit back with tariffs on about $110 billion in U.S. imports.
The nonpartisan Congressional Budget Office on Wednesday cautioned that Trump’s tariffs are already expected to reduce gross domestic product for 2019. “If trade barriers rose higher or concerns about such developments increased, domestic investment and output could be slower than we project,” the agency said.
Trump, a self-described “tariff man” who recently called himself “the Chosen One” to fight a trade war against China, has claimed that the tariffs are a good thing for the U.S. Yet earlier this week, he floated both fiscal and monetary policy proposals to give the economy a boost.
He suggested in the Oval Office that he was “thinking about” plans to lower taxes, including a payroll tax cut. But he reversed himself a day later.
On Thursday, top economic advisor Larry Kudlow said in a television interview that there could be a tax cut before the 2020 presidential election.
In a text message to CNBC, Kudlow also confirmed to CNBC that he supported a tax cut proposal floated earlier Thursday by Sen. Rick Scott, R-Fla. Scott’s plan would “reduce taxes for middle-class families & workers by the amount the Treasury is collecting in tariffs.”
“I do support the proposal,” Kudlow texted.