Trump threatens putting tariffs on all imports from China

Cornelia Mascio
Luglio 20, 2018

The president repeated his criticism of the Federal Reserve for raising interest rates while the US dollar continued to get stronger.

Trump followed up the CNBC comments with a tweet on Friday, in which the president said the Fed's interest-rate tightening "hurts all that we have done".

The Fed raised interest rates twice this year and Mr. Powell said two more increases are likely before the end of 2018. The Fed has been carefully and gradually raising rates over the past several years to keep inflation in check and to prevent the economy from overheating. But rate increases also make borrowing costlier for households and companies and can weaken the pace of growth.

Trump has been threatening to levy tariffs on European auto manufacturers in a bid to force more production into the US.

Presidents have long declined to comment on the Fed's actions, out of respect for the independence of the institution, and to avoid any hint of political influence over the nation's monetary supply.

The Fed slashed short-term rates to near zero in the wake of the 2008 financial crisis. That policy drew rebukes from many Republican lawmakers. In his remarks to CNBC, Trump called Powell "a very good man".

"While reviewing 16 OECD economies, they showed that countries with independent central banks generally had lower inflation without "suffering any output or employment penalty", Daco said.

"I don't like all of this work that we're putting into the economy and then I see rates going up", he said.

"I'm not happy about it".

The US and China have already imposed tit-for-tat tariffs of $34bn on each other's goods. The probability investors assigned to a Fed rate hike in September was little changed near 90 percent after the president's remarks, while the probability of a December hike was also holding near 65 percent, according to trading in federal funds futures. "I want them to do well", the United States president said of China.

Randall Kroszner, a former Fed governor, said the central bank has withstood political pressure before and will continue to do so under Powell's leadership.

It wasn't the first time in history the Fed has faced pressure from a USA president. Now, even if the Fed pauses its rate-hike campaign for valid economic reasons, it could look politicized.

Trump also expressed concerns about how higher interest rates would impact record levels of USA federal debt, which has now exceeded $20 trillion.

"If the election was today, and Hillary was on the ticket and Trump was on the ticket, I'd absolutely vote the same way", he tells CNBC. President Richard Nixon encouraged Arthur Burns, the Fed chairman at the time, to help boost economic growth ahead of Nixon's 1972 landslide re-election.

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