Trump Is Ready To Go All In On Trade War With China

Trump Is Ready To Go All In On Trade War With China

Troy Powers
July 23, 2018

Because he hasn't done enough this week, Donald Trump sat down with angry leprechaun in human disguise Joe Kernen, and broke with the respected tradition of the White House staying out of The Federal Reserve's beeswax.

Despite this, Trump said that the Fed should keep rates low so the US economy could make up lost ground to China.

"I'm not thrilled", he said in an interview on CNBC television. "We have been ripped off by China for a long time", he said.

After his posts, the US dollar extended losses against the European Union's euro, the Chinese yuan and Japanese yen.

Trump authorized the tariffs after an investigation he ordered by the U.S. Trade Representative's office found that China was violating intellectual property rules and forcing American companies operating in China to hand over their technology secrets to gain access to the market.

The U.S. central bank has hiked rates twice this year and most experts expect two more increases by year's end.

The dollar index, which measures the greenback against six major peers, was down 0.70 per cent at 94.441 in late trading on Friday.

This was not the first time Trump departed from a long-standing practice by USA presidents of respecting the Federal Reserve's independence by refraining from commenting on interest rates or the value of the US dollar, a custom he dismissed on Thursday.

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"I'm not doing this for politics - I'm doing this to do the right thing for our country", he added.

Trump's comments came shortly after CNBC aired an interview with the president in which he bashed the Fed's planned rate hikes.

Fed Chairman Jerome Powell, who Trump named to lead the USA central bank, said earlier this month he was not concerned about pressure from US politicians. Chairman Jerome Powell has played down concerns about Trump's politicizing the Fed.

Trump called Powell "a very good man" but worries that the work the administration has done will be nullified, CNBC reported.

Mr. Trump's economic policies, including the biggest tax cut in US history, have fueled a strong economic expansion and record low unemployment. Eventually Burns relented, aiding Nixon but also helping to feed runaway inflation that dogged the USA economy for almost a decade.

"I don't really - I am not happy about it", Trump said in excerpts released by the network. "The economy has been on its strongest footing in some time".

Powell has said he believes the economy is strong enough for the Fed to continue normalizing rates, which were held at a historically low level during the recovery. This allows it to make moves that it believes are in the best interest of the USA economy, even if those decisions are seen as unpopular by the party in power.