Trump says China will suffer if data show that trade war hurts the US

President Trump said on Tuesday that Chinese production would "crumble" if the country did not agree with the United States' trading conditions, as recently released data showed that its trade war was rewinded to the American shores and hurt the factories that the president wanted to reach. .

Days after new rates came into effect on both sides of the Pacific, a closely watched index of US manufacturing activity fell from 51.2 to 49.1, indicating a contraction in US manufacturing activity for the first time since 2016 The companies responding to the Institute for Supply Management research, on which the index is based, mentioned shrinking export orders due to the trade dispute, as well as the challenge of moving supply chains from China to avoid rates.

The problems of the manufacturing sector are likely to increase as the two largest economies in the world continue to escalate their trade struggle. On Sunday, Mr. Trump placed a new 15 percent rate on a range of consumer goods, including clothing, lawn mowers, sewing machines, food and jewelry, and Beijing took revenge by raising rates on $ 75 billion in American products. China also said on Monday that it filed a complaint with the World Trade Organization about Mr. Trump's new rates.

Markets dropped with weaker economic news and concerns about the trade war. The S&P 500 fell by around 0.9 percent, with particular weakness in industrial and energy supplies.
The prices of important industrial raw materials were also lower, with futures prices for American crude oil being around 3 percent as a benchmark. Copper, considered a health barometer of the global industrial sector, fell slightly less than 1 percent.

The yield on the 10-year Treasury fell to 1.45 percent, as nervous investors continued to buy government bonds, causing prices to rise and yields lower. The fall in bond yields this year - the return on the 10-year bond was more than 3 percent at the end of 2018 - suggests a broad reduction in investors' economic growth expectations.

"The American trade war with the world has blown a big gap in the confidence of the manufacturers," wrote Chris Rupkey, the chief financial economist at MUFG Union Bank, in a note on Tuesday. "The manufacturing sector has been officially rejected and is declining for the first time this year because Chinese rates and the slowdown in exports are really starting to bite."

The president has maintained that the pain of the trade war falls mainly on China and not on the United States. On Friday, he said American companies left China in response to their rates, a development that put the United States in an "incredible negotiating position." And he said that any company that complained about financial pain of the rates had bad management, not the trade war.

On Tuesday, he warned Beijing not to try to wait for a new administration after the 2020 elections, saying that the Chinese supply chain "will crumble" and that it would be "a long time to bleed jobs and businesses for a long time."

Many top managers and trade groups say they support the President's goal to change China's economic practices, especially companies that require companies to transfer valuable technology as a condition for working in China. But companies are starting to express concern about the seemingly endless trade war. Many large companies, particularly in retail and industry, have lowered sales and profit forecasts due to rates.

The potential of the trade war to slow America's economic expansion, including its impact on the manufacturing sector, has already led to concerns from the Federal Reserve officials. The Fed cut interest rates for the first time in more than a decade in July, and officials have said they are willing to lower them further to protect the economy from fallout against slowing global growth and trade risks.

Even some officials who did not vote for the July interest rate cut say the economic risks have increased.

Eric Rosengren, president of the Federal Reserve Bank of Boston and a monetary policy candidate this year, indicated that he still preferred to wait and look at incoming economic data before passing on the interest rate cuts after the July movement, which he opposed agreed.

But he also said it was "clearly reasonable" to judge that the risks to the economy were increased. "If those risks become a reality, the right monetary policy would be to aggressively reduce," he said, suggesting that he might have a preference for rapid interest rate cuts if economic data were meaningfully obtained.

The Trump government has been exerting pressure on China for more than two years to conclude a trade agreement that would strengthen protection for American intellectual property and result in large purchases of American products. But the two sides continue to have significant disagreements, including which of Mr. Trump's rates should be reversed and what legal changes China should make to treat US companies more fairly.

Since the conversations between the two countries have been in the lead, that is a long time to stand almost that China is sending to the United States. Sunday, the Trump administration sends a levy of 15 percent at about $ 112 billion to Chinese goods and planning to place rates at about $ 160 billion to mobile phones, laptops, clothes and toys on December 15th. Mr. Trump also said that the United States will increase targets for products to value $ 250 billion to 30 percent of 25 percent on October 1, China has sworn on 15 December to revoke with more own rates. Although a deal of Further, the two parties may increase the increases and another stick-firing the Fairies and China in Spain affiliate a meeting in Washington and American officials will both be at the side line of the United Nations General Asternation in the month of New York. MYRON Brilliant, the Executive Vice President of the World Warnings to work for a few people 'premiums to be reached to be reached from the US Government's purchase can be reached to be able to recover from the US Governments of the Bruwen Government "Most Policy Purchases of American Agricultural Products, a bit of the CONTRACTS", you will be able to recover. "There are a confidence shortage of the two governments, to be able to." We are in a stress in need to configure the fact that you will be able to build stage in order to convene your. Go "You are a confidence shortage of Confidence in the relationship to build both. Go to the fact that you will be able to convert to the fact that you conclude to make your government".