Mnuchin says Trump respects the independence of the Fed

Mnuchin says Trump respects the independence of the Fed

Washington announced the nuclear technology controls a day after the U.S. Justice Department said it had arrested and indicted a spy for China's Ministry of State Security on charges of economic espionage.

The US recently imposed tariffs on $200 billion worth of Chinese exports, prompting Beijing to counter with its own tariffs on $60 billion worth of US products.

"Exports continued to defy United States tariffs last month but imports struggled in the face of cooling domestic demand", said Julian Evans-Pritchard of Capital Economics in a report.

Imports grew 14.3 percent, down from 20.9 percent.

China retaliated by imposing $60 billion in tariffs on United States products. This makes Chinese products cheaper overseas.

The yuan has fallen for weeks against the U.S. dollar, dropping nine percent in the past six months, which mitigates the rise in the price of Chinese goods caused by punitive USA tariffs. But that might hurt China's economy by encouraging an outflow of capital. Vice President Mike Pence delivered a speech last week in Washington signaling a firmer USA push-back against Beijing as trade anxiety weighs on the looming midterm congressional elections. That designation would be a first for China and would trigger a process that could lead to punitive steps after a series of talks.

On Thursday, the U.S. said it would restrict exports of nuclear technology to China given worries it was being diverted to support the military.

"A lot of people were concerned when the QEs were done whether the Fed would ever be able to downsize and I think the market has handled the supply very well, ' Mnuchin said".

"They lived too well for too long", Trump said of the Chinese during his Fox News interview.

But China has been standing firm, repeatedly saying that the only solution was through negotiation and compromise on both sides.

"Bullying might be effective for small economic entities, but it will not be effective against a big economic power", Yu wrote in a column published Friday in the state-run China Daily.

Indeed, analysts expect the trade imbalance to continue to widen over the next few months before the next round of American tariffs kick in, in no small part because the divergence in consumer demand in the two countries.

Ryan Hass, a China expert at the Brookings Institution, said: "President Trump is on track this year to preside over the new record for the largest trade deficit in the history of US-China relations, beating the record that was set under his watch last year".

"If they decide they don't want to hold them, there are other buyers", Mnuchin said in an interview with the outlet.

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