U.S. President Donald Trump tweeted he wouldn’t blame China for a “hard landing,” but Beijing took aim at Trump’s recent call for a stronger U.S. dollar.
“If you put more money in U.S. Treasuries the value of the U.S. dollar will decrease and that will be good for the U.S. economy and good for the entire world economy,” Foreign Ministry spokeswoman Hua Chunying said on Tuesday. “However, the U.S. government seems to neglect that fact. They are trying to talk about issues in a way that has dollar value as the most important thing.”
International Monetary Fund Managing Director Christine Lagarde warned that a strong dollar has its price. “The risk is that it may impact a recovery and investment,” she said.
Heightened geopolitical tensions
Trade tensions between China and the U.S. ratcheted up further Tuesday after two officials from China said a trade war was in its “final stage.”
The comments, which echo those made by Trump earlier this year, come amid hints from both Washington and Beijing that they’re closing in on a deal to resolve the trade dispute.
But Chinese Vice Commerce Minister Wang Shouwen told a news conference that the trade fight was one of the key risks to the world economy, and that it would take a long time to resolve.
“China is prepared to fight and win this war,” he said.
Trump, who said last week that he was “not very happy” with current trade talks, blasted the reports Tuesday.
“I never said I was happy with trade negotiations with China. I said I wasn’t happy with the process. China is far richer than the U.S., and its standards of living is much higher. We are far less rich!” he said on Twitter.
Europe is due to release its October manufacturing data at 9:30 a.m. ET. Analysts at Capital Economics are predicting the numbers will be weaker than last month.
“We expect eurozone manufacturing to have weakened significantly in October amid mounting trade tensions between the U.S. and China, with a moderation likely to be widespread,” Capital Economics said in a note.
Data from China and France are due out at the same time.
More than an art or science
A settlement is unlikely to be reached any time soon, according to Julian Evans-Pritchard of Capital Economics.
“It doesn’t appear that there are any clear roadmap, or that the government is planning any coherent response to the pullback in share prices,” he said.
Earlier this week, the Trump administration moved to significantly ramp up its campaign against Chinese cyber hacking. If the news report is correct, analysts say Trump is taking the government’s public side of the conflict with China, rather than engaging with the country directly.
“I’ve been involved in negotiations with them and I have been at meeting with them and that is not how it is happening,” Trump said at a meeting at the White House on Monday.
Meanwhile, the developments in China came just as a U.S. court sided with a team of China experts and a professor over the federal government’s classification of their book, “Artificial Intelligence: Creating A Universal Mind.”
The feds ordered the Oxford University Press to remove sections of the book that discussed China’s technologies and made charts showing the size of its data base. The book, written by scholars Jack Poulson and Gordon Haff, doesn’t explicitly mention the United States.