Category: Trade

Trump Struggles with Economic Policy in Challenging Bloomberg Interview

In a recent interview with Bloomberg News, former President Donald Trump faced intense questioning regarding his economic policies, revealing a significant lack of understanding of basic economic principles. During the discussion, Bloomberg Editor-in-Chief John Micklethwait challenged Trump on his plans involving widespread tariffs on imported goods, which have been criticized by economists for potentially raising costs for American consumers. Trump maintained that other countries would bear the brunt of these tariffs, demonstrating a disconnect from the realities of international trade.

As the conversation progressed, Trump became increasingly defensive, dismissing critiques from Micklethwait and attacking the credibility of the Wall Street Journal when confronted with estimates that his economic proposals could inflate the national debt by $7 trillion. Despite Micklethwait’s attempts to keep the discussion focused, Trump often veered off-topic, notably failing to provide coherent answers about how his policies would aid small businesses that rely on imports.

Trump’s frustrations were palpable as he deflected questions regarding the impact of his immigration policies on the labor market. Instead of addressing economic implications, he resorted to discussing crime rates among undocumented immigrants, making unfounded claims about the dangers they pose. Micklethwait attempted to redirect the conversation to economic outcomes, but Trump continued to emphasize crime, undermining the economic discourse.

In a particularly notable moment, when asked about how he would cut government spending, Trump pointed to the remodeling of Air Force One as an example, which did little to elucidate his fiscal strategy. This response further exemplified his inability to articulate a clear economic vision, relying instead on vague anecdotes and deflections.

The interview concluded with Trump attempting to justify his disjointed speaking style, referring to it as a ‘weave’ of thoughts. However, this approach did not resonate well, as many observers noted that it reflected a troubling lack of clarity and focus on pressing economic issues that will impact voters in the upcoming election.

(h/t: https://www.rollingstone.com/politics/politics-news/trump-crumbles-pressed-economic-policy-bloomberg-interview-1235134459/)

Trump targets ‘pathetic’ Federal Reserve after worst manufacturing reading in a decade

President Donald Trump again attacked the Federal Reserve on Tuesday after the weakest U.S. manufacturing reading in 10 years.

In a tweet, the president wrote Fed Chair Jerome Powell and the central bank “have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected.” He contended the Fed has set interest rates “too high.”

“They are their own worst enemies, they don’t have a clue,” he wrote. “Pathetic!”

As his trade war with China rages on, Trump has repeatedly blamed the Fed’s interest rate policy for concerns about a slowing U.S. economy. He has contended the central bank has not moved quickly enough to ease monetary policy — though the Fed has cut its benchmark funds rate twice this year.

The Fed did not immediately respond to a request to comment.

Trump’s tweet comes after the Institute for Supply Management’s manufacturing reading fell to 47.8 in September, down from 49.1 in August. A reading below 50 shows a manufacturing contraction.

The poor economic data contributed to major U.S. stock indexes sliding Tuesday.

The dollar index, which measures the U.S. currency against a basket of global currencies, has climbed more than 3% this year and sits near its highest level since mid-2017. A stronger dollar relative to global currencies is generally expected to reduce exports and increase imports, hurting manufacturers because it makes their products more expensive overseas.

While exchange rates may have contributed to the drag on manufacturing in September, trade also did, according to ISM.

“Global trade remains the most significant issue as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a release announcing the data.

Trump has repeatedly downplayed any concerns about a looming American recession. He has also contended his trade conflict with the second-largest economy in the world will not harm businesses or consumers — despite indications that it has already started to hurt some companies and worry Americans.

Seeing concerns about a flagging economy as a ploy to discredit him before the 2020 election, Trump has claimed the central bank bears the blame for any slowdown rather than his own policies.

[NBC News]

Media

Trump blasts Fed for not helping manufacturers

President TrumpOpens a New Window. on Tuesday continued to take on the Federal ReserveOpens a New Window., saying the central bank “loves” to watch American manufacturers struggle.

“The Federal Reserve loves watching our manufacturers struggle with their exports to the benefit of other parts of the world. Has anyone looked at what almost all other countries are doing to take advantage of the good old USA? Our Fed has been calling it wrong for too long!”

Trump has heavily criticized the Fed and its chairman, Jerome PowellOpens a New Window. multiple times over the past several months. The president’s biggest issue with the Fed is over the size of its latest interest rate cut. While the central bank lowered the benchmark federal funds rate by a quarter-point last month, Trump has repeatedly called for a larger cut.

Meanwhile, manufacturing activityOpens a New Window. across Mid-Atlantic States showed little improvement in August, according to data released Tuesday from the Federal Reserve Bank of Richmond.

“The composite index rose from -12 in July to 1 in August, buoyed by increases in the indexes for shipments and new orders,” the survey found. “However, the third component, employment, fell. Firms reported increasing capital expenditures and inventories, but the measure of local business conditions was slightly negative. Manufacturers were, however, optimistic that conditions would improve in the next six months.”

The survey indicated that while wage growth continues, firms were having difficulty finding employees with the necessary skills for open positions — and it anticipates that both of these trends will continue. Also, “many firms saw employment decline while the average workweek increased in August,” according to the survey.

[Fox Business]

Beijing denies Trump’s claim that China called US officials to restart talks

President Donald Trump said U.S. and Chinese officials spoke Sunday and he is optimistic China wants to make a deal after the trade war between the two countries escalated in recent days.

“They want to make a deal,” Trump told reporters Monday during a meeting with Egyptian President Abdel-Fattah el-Sissi at the Group of Seven Summit. “That’s a great thing.”

The conversations Sunday between the U.S. and Chinese officials were the first since the two countries lobbed a new round of tariffs at each other last week. Neither side formally broke off talks and White House officials had said they expected negotiations to continue despite the new tariffs. But investors had feared China could walk away from the negotiating table.

Speaking to reporters, Trump heaped praise on Chinese President Xi Jinping, calling him a “great leader” and said China wants “to do something very, very badly.” He said the calls were at the “highest levels.”

“We are probably in a much better position now than any time in the negotiations,” Trump said in a meeting Monday with German Chancellor Angela Merkel.

When asked about the phone calls, Chinese Foreign Ministry spokesperson Geng Shuang said, “I haven’t heard about this.” News of Trump’s comments was breaking as he was addressing reporters.

Hours earlier, Chinese Vice Premier Liu He said China sought “calm” negotiations and opposed an escalation.

“We are willing to solve the problem through consultation and cooperation with a calm attitude,” he said, according to Chinese newspaper Caixin. “We firmly oppose the escalation of the trade war,” he said, adding that it “is not conducive to China, the U.S. and the interests of people all over the world.”

Liu, China’s top trade negotiator, was speaking at a tech conference in Chongqing in southwest China, the Chongqing Morning Post reported.

The stock market fell sharply Friday after China announced it would slap retaliatory tariffs on $75 billion worth of U.S. goods, and Trump hit back saying he would increase existing tariffs on $250 billion in imports to 30 percent from 25 percent Oct. 1.

He also said that a planned 10 percent tariff on a further $300 billion in Chinese goods would now be taxed at 15 percent starting next month.

But the continued talks and optimism from Trump eased financial market jitters. U.S. stock futures pointed to a recovery Monday morning, with Dow futures jumping more than 200 points.

Trump’s top economic adviser, Larry Kudlow, said Sunday afternoon that he was anticipating a call from the Chinese this week and for Chinese officials to still come to Washington as planned.

“You’ve got both sides playing their game, we get that,” Kudlow told reporters. “As long as they are talking, I’m good.”

Trump also signaled a hint of optimism on Iran.

He said he didn’t feel disrespected by the surprise arrival of Iranian Foreign Minister Mohammad Javad Zarif at the seaside town where the meeting of world leaders is taking place. Trump said French President Emmanuel Macron let him know Zarif was coming on the day of his arrival.

“I don’t consider that disrespectful at all, especially when he asked for my approval,” Trump said of Macron.

But White House aides said they felt blindsided by the unanticipated visitor, and some were upset at the French over the move, U.S. officials said shortly after Zarif’s arrival.

A spokesman for Zarif announced that he had arrived in Biarritz at the invitation of the French foreign minister “to continue talks” between the Iranian and French governments.

Trump said it would have been too soon to meet with the Iranians, and he declined to comment when asked if he sent any message to Zarif. There is no indication Zarif would have been willing to meet with the U.S. officials.

Trump said he isn’t looking for regime change in Iran, but that he wants to see the country abandon its nuclear program and stop its terrorism funding before lifting financial restrictions that have crippled its economy.

“We are looking to make Iran rich again,” Trump told reporters Monday. “Let them be rich.”

[NBC News]

Reality

Beijing has no idea what Trump is talking about.

Trump says he’s ordering American companies to immediately start looking for an alternative to China

President Donald Trump on Friday said he was ordering U.S. companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).”

And Trump said he will respond this afternoon to China’s newest round of tariffs on U.S. goods.

The White House did not immediately respond when asked if the announcement, delivered in a four-part Twitter thread Friday morning, constituted an official order from the president.

It was not immediately clear how, or under what authority, the president could implement these declared orders, or whether he had already done so.

Stocks sank to session lows shortly after Trump’s tweets. The Dow Jones Industrial Average fell more than 435 points, or 1.6%, while the S&P 500 slid 1.7% and the Nasdaq Composite dove 2%.

In a statement, UPS said that it “follows all applicable laws and administrative orders of the governments in the countries where we do business. We work closely with regulatory authorities to monitor for prohibited substances.”

FedEx also responded: “FedEx already has extensive security measures in place to prevent the use of our networks for illegal purposes. We follow the laws and regulations everywhere we do business and have a long history of close cooperation with authorities.”

Amazon and the Postal Service were not immediately available for comment.

Trump’s tweets followed another missive against Federal Reserve Chairman Jay Powell, who had just pledged to “act as appropriate” to sustain the U.S. economy amid the “deteriorating” global economic outlook.

In an apparent response, Trump tweeted: “Who is our bigger enemy,” Powell or Chinese President Xi Jinping?

Earlier Friday, China had announced it would slap retaliatory tariffs of 5% and 10% on roughly $75 billion in U.S. imports. The new import taxes represent the latest escalation in the increasingly fraught U.S.-China trade war, as well as a direct response to Trump’s plan to impose duties on $300 billion worth of China’s goods by mid-December.

Top trade advisors Robert Lighthizer and Peter Navarro were reportedly near the Oval Office just before the president sent his latest tweets. A source later told CNBC that Trump was meeting with his trade team Friday.

[CNBC]

Panicked Trump retweets claim farmers love him and Democrats are to blame for auto industry job losses

President Donald Trump seemed panicky Sunday night, searching for validation that everything is going well in his country despite reports to the contrary.

The president retweeted the chair of the Republican Party, who posted a video showing an Iowa farmer who loves Trump. The move comes after Trump’s Secretary of Agriculture got an ear full from farmers about not doing “great” under this presidency.

“We are not starting to do great again,” said Brian Thalmann, who serves as the president of the Minnesota Corn Growers Association. “We are starting to go down very quickly.”

Second, the president tweeted that a Joe Biden presidency would kill the fossil fuel industry and the auto industry along with it. Unfortunately for the GOP, the auto industry is already making a move to more fuel-efficient vehicles and autonomous cars. One plant that Trump promised to save in 2017 just closed in an Ohio townthat isn’t far from Michigan.

“He came to our community and said: ‘Don’t sell your house. These jobs are coming back,’” said David Green, president of United Auto Workers Local 1112. “We’ve seen nothing but job losses around here.”

Trump went on to retweet claims the economy is strong and everything in the United States is going extremely well.

[Raw Story]

Trump Ratchets Up U.S.-China Trade War With More Tariffs; Stocks Slide

President Trump announced Thursday that the United States will impose a new 10% tariff on $300 billion worth of products imported from China, saying Beijing had broken some of the promises it made in trade negotiations.

The new tariffs, which are set to take effect Sept. 1, represent another ratcheting up in trade tensions between the countries and sent stocks falling sharply. 

Major U.S. stock indexes fell about 1% and the Dow Jones Industrial Average closed down 280 points. Oil prices tumbled about 8% after Trump’s announcement on concerns that the tariffs would hurt demand.

The move comes days after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin traveled to Shanghai for a brief meeting about trade with Chinese officials.

The White House said the meeting was “constructive” and negotiations were scheduled to resume in September in Washington, D.C.

But Trump indicated he was disappointed by the lack of progress in the talks, saying China had failed to follow through on promises to curb the sale of fentanyl and buy more products from U.S. farmers.

“Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die!” Trump said in a tweet.

Still, the president tried to strike a more positive tone than he has in the past, saying, “We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!”

The president has already imposed 25% tariffs on $250 billion in Chinese imports. In May, Trump had threatened additional tariffs but suspended them at the last minute.

Now, he is going ahead with tariffs after all, though at a lower rate than before.

On Wednesday, the Federal Reserve cut interest rates for the first time since 2008 amid signs that the economies of the United States and other countries are slowing. The central bank also cited the uncertainty created by the standoff with China.

“Certainly, we’ve seen … that when there’s a sharp confrontation between two large economies, you can see effects on business confidence pretty quickly and on financial markets pretty quickly,” Fed Chairman Jerome Powell said in a news conference after the interest rate announcement.

Industry groups said the new tariffs will hurt shoppers and threaten jobs.

“We are disappointed the administration is doubling-down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment,” David French, vice president of government relations at the National Retail Federation, said in a statement. “These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods.”

Matt Priest, head of the Footwear Distributors and Retailers of America, said in a statement: “President Trump is, in effect, using American families as a hostage in his trade war negotiations. Tariffs are taxes and this move will noticeably raise the cost of shoes at retail and will have a chilling effect on hiring in the footwear industry.”

Trump has lately indicated that the U.S. can win a trade war with Beijing, pointing out that China’s economy has been slowing after a long period of rapid growth.

U.S. officials want China to address the theft of intellectual property, stop subsidizing its companies and open its markets to more U.S. goods.

[NPR]

Donald Trump rebuffed U.S. airlines and trade adviser in a tense Oval Office meeting

The three largest U.S. airlines presumed that President Donald Trump would take their side in a ferocious, yearslong dispute with Persian Gulf-based airlines — if they could just get his attention.

They got his attention, by way of TV ads the president saw on Fox News. But when Trump finally gathered executives from both sides of the dispute this month in the Oval Office for a heated, “Apprentice”-worthy showdown, he ultimately sided against them.

During an hour-long session, the president ribbed American Airlines CEO Doug Parker over his company’s flagging stock price, asking why it’s so low at a time when the stock market is surging. He scolded Delta Airlines, whose CEO Ed Bastian did not attend, for buying billions in planes from the European firm Airbus while Qatar Airways is buying its jets from Chicago-based Boeing Co.

And he repeatedly harped on Bastian’s absence, questioning how he could be a no-show after his airline — more than any other — had been fanning the flames of the fight.

“The president kept going back to it,” one person who attended the meeting told NBC News. “There was a lot of yelling.”

The meeting was a stark illustration of the president’s freewheeling decision-making style, particularly in areas like U.S. business where he is most confident in his own instincts.

It was also a steep blow to Peter Navarro, Trump’s trade adviser, who found himself on the losing end of a tug of war with national security adviser John Bolton, National Economic Council Director Larry Kudlow and others in Trump’s White House.

This account draws on interviews with 10 individuals, including senior Trump administration officials, airline officials, congressional aides and others who attended or were briefed on the unusual July 18 meeting.

Those individuals, who spoke anonymously because the meeting was intended to be kept private, said nobody knew what the president would do when he sat the CEOs or their representatives from both sides of the dispute down in front of the Oval Office’s Resolute desk and asked them one by one to make their case.

For more than four years, the “Big Three” U.S. carriers — American, Delta and United Airlines — have been waging a bitter battle with Qatar Airways and two Emirati airlines over flights between the U.S. and the lucrative European market. The U.S. carriers argue that the Mideast airlines are heavily government-subsidized and are undercutting them by offering below-market fares on flights that never stop in the Middle East.

Most recently, they’ve turned their focus to Air Italy, which added new flights between Milan and the U.S. after Qatar Airways bought a 49 percent stake. The U.S. carriers say it’s a scheme to circumvent restrictions in the U.S.-Qatar “Open Skies” agreement on civil aviation.

Navarro, Trump’s hard-charging trade adviser known for his staunch protectionist views, has kept the issue alive in the White House after overseeing agreements last year to resolve previous grievances by the U.S. airlines, several administration officials said.

But as the Qataris and the U.S. airlines clashed anew this year over Air Italy, Navarro’s campaign thrust him into conflict with the rest of the White House. It drew the attention of Bolton, who enlisted Kudlow and other agencies to wrest back oversight of the issue from Navarro, people familiar with his efforts said.

[NBC News]

Trump targets French wine to retaliate for France’s digital tax

The United States will announce retaliatory action against France in response to the country’s new tax affecting American technology companies, President Donald Trump said Friday.

He suggested he could target French wine with tariffs — a move experts considered the most likely U.S. response to the French digital services tax.

“I’ve always said American wine is better than French wine!” Trump tweeted.

In the tweet, the president said his administration will unveil “a substantial reciprocal action” following what he called French President Emmanuel Macron’s “foolishness.”

Earlier this month, France passed a 3% tax that will affect firms such as Facebook and Google that draw about $28 million or more in revenue from digital services in France. The Trump administration then started an investigation under Section 301 of the Trade Act of 1974.

If, after the probe, the U.S. determines the tax is discriminatory or unreasonably targets U.S. firms, Trump could respond with tariffs. Trade experts considered Trump’s most likely response a 100% tariff on French wine — one of the country’s signature, symbolic products.

In a statement Friday, White House spokesman Judd Deere criticized France’s tax but did not give any new details on what the U.S. could do to retaliate. He said the administration is “looking closely at all other policy tools” in addition to the already launched investigation as it determines how to respond to France.

“The Trump Administration has consistently stated that it will not sit idly by and tolerate discrimination against U.S.-based firms,” he said.

In a CNBC interview last month, Trump suggested he could put tariffs on French wine. He said California wine producers have complained to him about France putting higher tariffs on imports than the U.S. does. “And you know what, it’s not fair. We’ll do something about it,” he said.

France exported 3.2 billion euros (or about $3.6 billion) in wine to the U.S. last year, according to the Federation of French Wines and Spirits Exporters. The U.S. was France’s biggest wine export market.

Trump does not drink alcohol, but he is familiar with the wine industry. While in office, Trump has touted the Virginia-based Trump Winery operated by his son, Eric.

Tariffs on France would open up another conflict as Trump tries to navigate thorny trade relationships around the globe. Already in the coming months, the White House looks to push a skeptical Congress to approve Trump’s replacement for the North American Free Trade Agreement and strike a trade deal with China.

[NBC News]

Trump tweet sparks concerns that the US may raise tariffs on Europe

U.S. President Donald Trump has accused China and Europe of manipulating their currencies, raising fears that Washington will carry out repeated threats to impose tariffs on goods from the European Union.

“Accusations of Eurozone currency manipulation are … flying from the White House with talk of tariffs on the EU and European countermeasures heating up trade tension between the two regions,” said Robert Carnell, chief economist at Dutch bank ING.

In a tweet on Wednesday morning U.S. time, Trump said: “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA.”

He then called for easier monetary policy, adding that the U.S. should “match” the monetary policies of China and Europe.

In late May, the U.S. Commerce Department had proposed tariffs on goods from countries found to have undervalued their currencies against the dollar.

“This change puts foreign exporters on notice that the Department of Commerce can countervail currency subsidies that harm U.S. industries,” Commerce Secretary Wilbur Ross had said in a statement. “Foreign nations would no longer be able to use currency policies to the disadvantage of American workers and businesses,” he said.

[CNBC]

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