Donald Trump: China and European Union ‘Manipulating Their Currencies’

Ivan Schwartz
July 21, 2018

Trump's rebuke broke with more than two decades of White House tradition of avoiding comments on monetary policy out of respect for the independence of the U.S. central bank.

"As usual, not a level playing field", he continued.

"We're down a tremendous amount", said Mr Trump, reiterating his view that China's trade surplus with the United States amounts to unfair trading practices. Trump is certainly allowed to say what he wants about The Fed, and he wouldn't be the first president to try something, and like everything else, the Fed is now a partisan topic. Debt coming due & we are raising rates - Really?' Trump wrote.

"Trump wants to win over more voters by starting a trade war", the cartoon says. Chinese imports from the US totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion.

Beijing is targeting sectors, like agriculture, that could harm Trump politically at home, though he said in the CNBC interview that he is seeking to do only what is fair. He said he was "not happy" about recent rate hikes.

White House spokeswoman Lindsay Walters later said in an emailed statement that the president "respects the independence of the Fed".

Trump's comments are a break with tradition that presidents avoid commenting on the path of domestic monetary policy.

"So somebody would say, 'Oh, maybe you shouldn't say that as president.' I couldn't care less what they say because my views haven't changed", he said. "I'm doing this to do the right thing for our country".

European stock markets fell after the interview was broadcast, with the FTSE 100 down 0.2%.

The Federal Reserve got a rare piece of advice from the president Thursday.

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The Fed has raised rates five times since Trump took office in January 2017, and has penciled in two more hikes for this year. The Fed is charged with keeping prices stable, often by raising interest rates to prevent the economy from overheating.

Trump told CNBC that he's "not thrilled" with Fed Chairman Jerome Powell, who he appointed, over the central bank's rate hikes.

However, he added that he is "letting them do what they think is best".

In February, Jerome Powell, Trump's hand-picked choice, became Fed chairperson.

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Trump regularly claims that his policies, especially tax cuts enacted by Congress last December, have created jobs and economic growth.

Mr. Powell argues that the economy is strong enough to handle higher rates after the rates were kept artificially low to help the recovery from the Great Recession of 2007.

In congressional testimony this week, though, he expressed concern about Trump's confrontational trade policies. "Even if the remaining nominee were a 'like-minded low interest rate guy, ' that person would be but one out of a Committee of 12".

Trump is limited in how much direct pressure he can put on the Fed chief. But he also told CNBC during the campaign that he is a "low interest-rate-person".

Other reports by GizPress

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