Facts first: This is not nearly true; It is also not clear what Trump actually refers to here. The total size of the Chinese economy is estimated at about $ 13 trillion, making it impossible to lose more than it's worth. In addition, China's economy continued to grow during Trump's tenure.

China's GDP growth has remained above 6% since the election of Trump in November 2016. While Chinese economic growth has slowed, this trend was already under way before Trump was elected.

If China lost $ 15 to $ 20 trillion, it would completely oust the country from the world economic map.

The bigger point Trump seems to make here is that his trade policy is damaging China's economy. That carries at least a core of the truth. (As the economists have noted, the US economy is also damaged by these tariffs.)
Since China's entry into force of its first round of customs last summer, US imports from China have declined sharply as companies have begun to switch their sourcing to other East Asian countries such as Vietnam. In the first four months of 2019, Americans imported about 12% less from China than in the same period last year.

According to the research firm Capital Economics, Trump's 25% duty on all Chinese goods could cut Chinese GDP by 0.8 percentage points. Nearly half of this decline in GDP is likely to be due to lower tariffs on intermediate goods such as steel, according to Capital Economics.

Over the course of a year, this estimated 0.8% could account for some $ 100 billion – not nearly $ 15 to $ 20 trillion from Trump.

French wine

During his telephone interview with CNBC, Trump pointed out possible measures against France regarding the price of wine.

"You know, France charges us a lot for the wine, and yet we charge them very little for (American) wine, so the wineries come to me and say, 'Sir,' the California guys coming , "Sir, we're." If you pay a lot of money to bring our product to France, allow that country to have that French wine – these are some great wines, but we also have great wines – That's not fair, "said Trump.

It's not fair, we'll do something about it, "he continued.

Facts first: That is not completely right. While US tariffs on wine from the European Union are lower than EU tariffs on American wine, according to the Wine Institute, the US does not allow Trump to "come in for free" against French wine.

The EU import duty for wine for a 750 ml bottle "may vary between 0.11 and 0.29 USD, depending on the type of alcohol content of the wine," according to the institute. For comparison: "The US import tariff for a 750 ml bottle is $ 0.05 for still wine and $ 0.14 for sparkling wine."

And while the US and the EU maintain an agreement on wine trade in 2006, the Institute argues that since then, the EU has "introduced certain restrictions that increase costs or otherwise affect the competitiveness of US wine in the EU ".

A major limitation is the certification of wine imports from the USA. The US has no similar certification for French wine imports.

Another restriction that makes it difficult for American wine producers to sell in Europe is the restriction on the use of generic wine descriptions, including "Chateau", "Clos", "Tawny" and "Ruby" for their products.

What Trump will actually do about the price of wine is unclear, but at the end of last year the president threatened to impose tariffs on French wines – part of a larger tariff threat against the European Union.

"France makes excellent wine, but so does the US The problem is that France is making it very hard for the US to sell its wines to France and raising high tariffs, while the US is making it easy for French wines and levies very low tariffs fair, must change! "Trump tweeted last November.

European wine and cheese were also among the goods threatened with duties by the US commercial agent's office in April.

China's currency manipulation

Trump disagreed with his own finance department by calling China Currency Manipulator weeks after the agency no longer slapped the label on the Asian giants. "They devalue their currency, they've had it for years, which gives them a huge competitive advantage," the president said during his interview on CNBC before he attacked the Federal Reserve for not lowering interest rates in the US.

Facts first: China's currency fell 9% against the US dollar last year, according to an economic research firm, but the recent devaluation has not caused the US government to officially designate Beijing as a currency manipulator last month.

Speaking to CNBC, Trump said that the sharp decline in the Chinese currency must be "unconditionally" addressed as the yuan was devalued to offset tariffs on billions of dollars of Chinese goods in a continuing trade war between the two major economic superpowers.

Economists seem to agree that the weaker currency, whether intentional or not, has mitigated the tariff effect on China by making its goods cheaper. But it also increases the risk that the trade dispute will turn into a currency war.

A Capital Economics research note released on Monday shows that the weaker currency has "provided a cushion since the first tariffs were introduced" and that since then the yuan has been "9% weaker against the dollar and 6% trade-weighted" last year. "

"Another drop is likely when China's leaders conclude there is little point in waiting for a deal," the report said. "If President Trump obeys the impending 25% duty on the rest of China's goods, we believe the renminbi may be weakened."

On Sunday, Governor of the People's Bank of China, Yi Gang, admitted the weakness of his currency in an exclusive interview with Bloomberg News, pointing out that this was indeed a result of the US trade war.

"There's obviously a connection between the trade war and the renminbi's moves," Yi said in an interview in Beijing. "Lately it's a bit weaker due to the huge pressure from the US side."

At the end of May, the Treasury Department again refused to designate China as a currency manipulator, although Trump had pledged this as part of its 2016 campaign. Instead, the country was put on the "watch list" of the Ministry of Finance in its review of US trading partners along with eight other countries.

To be fair, the Finance Ministry's report raised "grave concern" about the significant devaluation of the Chinese currency against the US dollar, an important component of ongoing trade talks, and called on China to take steps to "continue to be a weak currency " to avoid.

"The Ministry of Finance will continue its increased bilateral engagement with China on foreign exchange issues as the RMB fell 8 percent against the dollar last year due to an extremely high and expanding bilateral trade surplus," said Minister of Finance Steven Mnuchin in a statement in May ,

However, the Ministry of Finance said that although China does not disclose its foreign exchange intervention, last year's direct intervention by People's Bank of China has been "limited".

Mnuchin met on the sidelines of the G20 economic summit in Fukuoka, Japan, with China's central bank governor Yi. In a tweet, Mnuchin described the meeting as "constructive" with an "open discussion on trade issues". It is unclear whether the two men discussed monetary issues.

immigration deal

At another point in his CNBC interview, Trump said that the US "got everything we want" in its negotiations with Mexico last week.

The president threatened to impose tariffs on Mexico if the country did not strengthen enforcement of immigration rules and prevented more migrants from illegally entering the US from the southern border. Last week, high-level US-Mexico negotiations took place in Washington, and the two countries signed a joint statement in which they agreed to several provisions to enforce immigration rules.

"We have everything we wanted and we will now be a great partner for Mexico, because now they respect us, they did not even respect us," Trump told CNBC.

Facts first: Trump's claim that the US "got everything we wanted" falsifies what we know about the bilateral negotiations. A key negotiating element is the so-called "Safe State Status", and Trump's statements were misleading as to the scope and timing of this provision.

Trump also pointed out that the US "is essentially applying the very strict immigration laws of Mexico and Mexico wants to do a good job bringing 6,000 soldiers to their southern border."

"Do you think they have agreed to that?" he added.

Despite Trump's suggestion that the provisions be new, the New York Times reported that the US and Mexico had agreed months earlier to some of the border policies outlined in the joint statement last week.

The Mexican government pledged to deploy the National Guard, focusing on the southern border – an integral part of the agreement on Friday – during secret meetings in March between former Interior Security Minister Kirstjen Nielsen and Mexican Interior Minister Olga Sanchez in Miami, USA Mexican officials familiar with the negotiations told the Times.

The most important extension of the agreement on a program to help asylum seekers stay in Mexico while processing their applications was set out in two heavily brokered diplomatic notes exchanged between the two countries, the Times reported. Nielsen announced protocols to protect migrants during a hearing of the House Judiciary Committee at the end of December.

Trump denied the story of the Times in a series of tweets on Sunday morning and wrote that his government, like others before, "worked on some aspects of the deal" for a long time "," but said they "were not able to do it to get or get it completely until our signed agreement with Mexico. "

Companies leaving China?

During the interview, Trump suggested that Beijing agree to an agreement, as the tariffs he sets for Chinese goods displace the deal.

"The China deal will work, do you know why? Because of the tariffs, because right now China is getting totally decimated by companies leaving China and going to other countries, including our own," he said.

Facts first: That's a bit over the top. There are indications that US importers are shifting some of their output outside of China since Trump introduced tariffs. However, there is little evidence that there is a mass exodus of companies that move completely away from China – a process that would probably take years.

There are currently $ 250 billion in Chinese goods tariffs that give US importers an incentive to find suppliers outside China to avoid paying the duty.
Trade data released by the US Census Bureau last week suggests that they are buying more from other Asian countries, importing about 12% less from China this year.

In the first four months of 2019 imports from the United States increased 38% from the previous year, 22% from Taiwan, 17% from South Korea and 13% from Bangladesh.

While these are significant increases, part of the production shifted long before Trump introduced tariffs outside of China – to places with even lower wages. US imports from countries such as Vietnam and South Korea have steadily increased over the last decade as these countries boosted apparel and electronics manufacturing. In addition, the US imports more when the economy is strong.

However, it is unclear whether companies are actually relocating their production outside of China or simply diverting goods for minimal processing before they are shipped to the US. The increase in imports from Vietnam and Taiwan suggests that it is at least partially explaining what is happening, according to a report by Capital Economics, a London-based research consultancy.

Besides, finding a supplier outside China that can produce the same product of the same quality and at a cheaper price is not always easy. Instead, an importer can decide to pay the costs and bet that Trump will raise the tariffs earlier rather than later. You can also choose to pass the costs on to consumers for the time being.

About 60% of companies surveyed by the American Chamber of Commerce (AmCham) and its counterpart in Shanghai said they had no plans to relocate production outside China due to tariffs.

Who pays the tariffs?

The President claimed that there had been no price increase for goods subject to the duties he was charging on Chinese goods.

"They've seen little or no price increases," Trump said, "because what China does is basically their businesses, they subsidize their businesses because they want people to work, they want to stay competitive."

Facts first: If it just could be that easy. While inflation has remained relatively low in the US, recent research indicates that prices for dutiable products have risen significantly.

Goldman Sachs' economists found that the prices of commodities for which tariffs were levied last year, mostly Chinese imports, have risen sharply compared to commodities without new tariffs. In other words, Goldman estimates that 40% of the cost of the goods has been passed on to consumers, the remainder being distributed among manufacturers and retailers. (So ​​far, these tariffs have almost doubled customs revenue and put billions of tax dollars into the treasury.)

Customs duty prices have risen the most, no matter which country they come from, as it is not possible to avoid tariffs by shopping at another retailer. For example, studies on washing machines show that consumers have gone beyond the cost of the original duties as the prices for complementary goods – in this case clothes dryers – have increased.

According to a study by economists from Princeton, Columbia and the New York Federal Reserve, US companies and consumers paid US $ 3 billion a month more for tariffs by the end of 2018.

The administration's own economic report acknowledges that consumers will pay a higher price for products as a result of these tariffs. 'These advantages are offset by the costs paid by consumers in the form of higher prices and lower consumption,' states the President's economic report published in March.

This story has been updated.

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