Trump slams Federal Reserve chair, threatens to escalate trade war with China

China
WILLIAM MOON/ABACA PRESS/TNS
President Trump announces his nominee for the chairman of the Federal Reserve, Jerome Powell, on Nov. 2, 2017, at the White House. On Friday, Trump called the Federal Reserve leader an “enemy.”

BY DON LEE
LOS ANGELES TIMES/TNS

WASHINGTON – President Donald Trump on Friday slammed the Federal Reserve leader as an “enemy” and unleashed a flurry of tweets attacking China after Beijing announced retaliatory tariffs on U.S. products.

In a heady morning that sent stock markets tumbling, Trump lit into Jerome H. Powell, whom he appointed as chairman of the U.S. central bank, after Powell stopped short of committing to make more interest rate cuts.

Trump also promised to respond to China’s counter-tariffs later Friday and tweeted that he had “ordered” American companies “to immediately start looking for an alternative to China.”

The statement has no force since it goes far beyond a president’s authority, but it indicated the depth of Trump’s agitation over his failure to prevail in a trade war with China that he had once predicted would be “easy.”

TWEETS TARGET FED, XI

Powell, in a highly anticipated speech Friday morning at the Fed’s annual conference in Jackson Hole, Wyoming, pledged to do whatever the Fed could to sustain U.S. economic growth. But the Fed, which made a small cut in a key interest rate last month, is divided on how aggressively it should respond in the face of economic crosscurrents that include strong domestic consumer spending and significant trade policy uncertainty.

Trump has demanded the Fed cut a full percentage point in its benchmark interest rate and take other steps to lower the value of the dollar to spur exports.

Not hearing the message he wanted, Trump tweeted Friday: “As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great.”

Then, in a remarkable charge, Trump tweeted: “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” referring to China’s president, Xi Jinping.

Soon after, Trump went on to attack China, which had announced tariffs of 5% to 10% on $75 billion of U.S.-made goods, to take effect on Sept. 1 and Dec. 15 — the same dates that Trump’s new tariffs on $300 billion of Chinese products are set to go into effect.

HEADED TO G-7 SUMMIT

China’s state-run news agency reported the tariffs just before Powell’s speech and as Trump was preparing to leave for the annual G-7 summit, where the leaders of Germany, Japan and five other advanced economies are meeting in France and where Trump is likely to feel heat on his trade policies.

Trump and his economic team have been increasingly concerned about the economy, which is weakening and could foil Trump’s reelection bid if it were to fall into recession. The president has said he is considering tax cuts and other ways to bolster growth, but at the same time he has become more strident about his costly trade war with China.

In a series of tweets Friday, he lashed out again: “Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far better off without them.

“The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,’’ he added.

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