WASHINGTON (REUTERS) - White House National Economic Council director Larry Kudlow says he sees no signs of a global recession if the current trade war with China continues.
US President Donald Trump on Tuesday (Aug 6) dismissed concerns over a protracted trade war with China, as Beijing warned that Washington's decision to label it a currency manipulator would lead to chaos in financial markets.
Mr Trump, who announced last week he would slap a 10% tariff on a further US$300 billion in Chinese imports starting September 1, said investment was pouring into the US economy. He also pledged to stand with American farmers in the face of Chinese retaliation.
China has halted US agricultural purchases and raised the specter of additional tariffs on US farm products.
Ratcheting up the pressure on China, the US Treasury Department said on Monday it had determined for the first time since 1994 that Beijing was manipulating its currency.
The move followed China's decision to let the yuan fall below the key seven-per-dollar level for the first time in more than a decade, rattling financial markets and dimming hopes for an end to a trade war that has dragged into a second year.
Wall Street notched its worst day of 2019 on Monday. Major US stock indexes were trading higher on Tuesday.
The Trump administration wants to continue trade talks with China and is still planning to host a Chinese delegation for further talks in September, Mr Larry Kudlow, director of the White House National Economic Council, told reporters on Tuesday.
He added that the US economy was still in good shape and said he saw no signs of a global recession on the horizon despite growing concerns the US-China standoff is slowing manufacturing activity around the world.
"The US economy is very strong. The rest of the world is not. We're the engine that makes it go. Frankly, I see no signs," he said, when asked about the prospect of a global recession. "The economic burden is falling vastly more on them (China) than us."
Mr Kudlow said Washington was forced to take the currency move given a 10% drop in China's currency since April 2018, and said other members of the Group of Seven (G7) industrialized countries supported the action.
The US-China dispute has already spread beyond tit-for-tat import tariffs to other areas such as technology, and analysts caution retaliation could widen in scope and severity, weighing further on business confidence and global economic growth.
The US currency action now has driven an even bigger wedge between the two countries.