By Robert Schroeder, MarketWatch
President Donald Trump on Monday predicted tariffs would spur a trade deal between the U.S. and China, adding that he was “a little concerned” about the merger agreement between Raytheon and United Technologies while criticizing the Federal Reserve anew.
XI MEETING AND CHINA TARIFFS
Trump in a CNBC telephone interview said tariffs would be imposed on more Chinese imports if President Xi Jinping didn’t attend the June 28-29 G-20 meeting in Japan, but then said “if we don’t have a deal” tariffs would be applied. He predicted the U.S. and China would work out a trade deal due to tariffs already in place on Chinese goods and the threat of more levies.
“The China deal is going to work out. You know why? Because of tariffs,” Trump said.
Speaking last week during a visit to France, Trump said he’d make a decision about slapping 25% tariffs on another $325 billion in Chinese imports after the G-20 summit.
Trump called into CNBC after Myron Brilliant, the head of international affairs at the U.S. Chamber of Commerce, told the network that Trump should not have used the threat of tariffs to try to force Mexico to crack down on illegal immigration. “If we didn’t have tariffs we wouldn’t have made a deal with Mexico,” Trump said , also taking a shot at the business group for what he said is protecting Corporate America and not the American people.
Late Friday, Trump said he’d suspended plans to impose tariffs on Mexican goods, tweeting that the country “has agreed to take strong measures” to stem the flow of Central American migrants into the U.S.
In the interview Trump also suggested a possible new front in his trade battles, saying there’s an unfair arrangement on wine imports and exports. “You know, France charges us a lot for the wine and yet we charge them little for French wine,” Trump said in reference to tariffs. “It’s not fair. We’ll do something about it.” The U.S. import tariff on a 750 milliliter bottle is five cents for still wine and 14 cents for sparkling wine, according to the Wine Institute . The advocacy group says the European Union import tariff per 750 milliliter bottle can range from 11 cents to 29 cents.
Also on CNBC, Trump said about the Raytheon-United Technologies merger, “I just want to see competition. They’re two great companies, I love them both. But I want to see that we don’t hurt our competition.” United Technologies /zigman2/quotes/203237915/composite UTX -0.40% announced an all-stock deal to merge with defense contractor Raytheon /zigman2/quotes/203226062/composite RTN -0.68% in a move that would create the world’s second-largest aerospace-and-defense company by sales.
Appearing on CNBC after Trump spoke, United Technologies Chief Executive Greg Hayes said “there is nothing anticompetitive about bringing these companies together” and predicted Trump would be supportive of the deal when he learned its details.
U.S. stocks /zigman2/quotes/210598065/realtime DJIA +0.40% /zigman2/quotes/210599714/realtime SPX +0.47% /zigman2/quotes/210598365/realtime COMP +0.87% rose Monday as trade tensions with Mexico faded.
FRESH FED CRITICISM
Trump also on CNBC leveled fresh criticism at the Federal Reserve over interest-rate policy, calling the central bank “very disruptive to us.”
It was his latest slap at the Fed, which raised interest rates four times in 2018. “They certainly didn’t listen to me because they made a big mistake: They raised interest rates far too fast,” Trump said.
More economists are now saying the central bank is likely to ease interest rates this year. Fed policy makers meet next June 18-19.