Trump calls for Fed to reduce interest rates amid trade war with China

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President Donald Trump took to Twitter on Tuesday morning to air his thoughts on the trade war with China, where he hinted at monetary actions from the Federal Reserve.

Trump explained that China would most likely manipulate its interest rates to keep its economy going during the trade war, but said that if the U.S. did the same, it would be “game over.”

“China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing,” Trump said in a tweet. “If the Federal Reserve ever did a ‘match,’ it would be game over, we win! In any event, China wants a deal!”

This isn’t the first time Trump has tried to manipulate the Fed into keeping interest rates low.

Back in 2018, Trump gave the Federal Reserve grief several times over interest rate hikes, saying he was not happy about it.

“I’d rather pay down debt or do other things, create more jobs, so I’m worried about the fact that they seem to like raising interest rates,” Trump said at the time. “We can do other things with the money.”

This was at least the third time that year that Trump had vocally challenged the Federal Reserve’s decision to raise interest rates.

Trump also tweeted several different times about moving jobs back to the U.S., “where they belong,” and that the U.S. has a bigger economy and will outlast China.

“China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position,” he tweeted. “Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China so that they will be more competitive for USA buyers.”

“We are now a much bigger economy than China, and have substantially increased in size since the great 2016 Election,” he continued. “We are the ‘piggy bank’ that everyone wants to raid and take advantage of. NO MORE!”

According to Trump, the two countries were on the verge of a trade deal last week, by Chinese President Xi Jinping backed down.

In response, Trump increased tariffs on $200 billion of Chinese goods to as much as 25% on Friday. He also threatened to tax the remainder of goods that the U.S. imports from China, which would be about $300 billion in products.

Jinping retaliated by enforcing a 20% or 25% tariff, up from the previous 10%, on $60 billion in American imports.

In response to the trade war, Wall Street got nervous, causing the SP 500 to fall by 2.4% on Monday, its worst day since early January. The SP 500 is now down a total of 4.6% in May.

But Trump isn’t nervous and said he will make a deal with China when the time is right.

“When the time is right we will make a deal with China,” Trump tweeted. “My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense. We have to be allowed to make up some of the tremendous ground we have lost to China on Trade since the ridiculous one sided formation of the WTO. It will all happen, and much faster than people think!”

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