At a breakfast meeting between the UK Prime Minister Boris Johnson and US President Donald Trump, Johnson said that he favors “trade peace” rather than “trade wars” and that the US should drop the current tit-for-tat tariff increases with China and negotiate a trade agreement without threats.
Ahead of the meeting with Trump, the Johnson said that Trump risks taking the blame for a global recession if he continues his trade war with China. Johnson said that Trump’s trade war was "not the way to proceed," and risked pushing the global economy into a downturn.
Johnson’s remark came after a remarkable week which saw China increase tariffs on U.S. goods and Trump retaliate by rising the rates on tariffs that the U.S. is applying to Chinese goods entering the country.
Trump also said that he was “ordering” American companies to find alternatives to manufacturing in China. The Dow Jones responded to the president’s comments by dropping more than 600 points on Friday. And rather than trying to calm markets and trade partners, Trump doubled down on his remarks on Sunday and said that he has the right to declare the escalating U.S.-China trade war as a national emergency if he wants to, and can order all U.S. companies to leave China.
Government and legal experts say that Trump does have some legal tools at his disposal and could sign an executive order that would tell U.S companies to leave China and further escalate the trade war. However, before U.S. companies would leave China, the Trump administration would face multiple legal challenges by companies who would refuse to abide by Trump’s directive.
Trump was asked at a press briefing at the G7 Summit if he had any second thoughts about the trade war with China and answered “yes,” but White House officials said that his regret wasn’t that he had started a trade war with China, but that he hadn’t raised tariffs on Chinese goods even higher than he had announced.
White House spokeswoman Stephanie Grisham wrote in a statement, “This morning in the bilat with the U.K., the president was asked if he had ‘any second thought on escalating the trade war with China’. His answer has been greatly misinterpreted. President Trump responded in the affirmative - because he regrets not raising the tariffs higher.”
Treasury Secretary Steven Mnuchin echoed Grisham’s statement and said, "The president is determined to have fair and reciprocal trade with China. This morning's comments weren't meant to back that off. It was meant to say he is as determined as ever on this issue. He wants a good deal."
In the U.S. domestic market, a report by financial firm JP Morgan released last week says that the U.S. tariffs on Chinese consumer goods will cost the average American household between $1,000 and $1,500 in 2020 and could be even higher if tariffs continue to be increased.