Trump threatens to cut trade with deficit countries unless the Fed lowers rates
Trump trade policy threatens surplus countries as pressure mounts on the Fed See how tariffs, deficits, and rate cuts could reshape markets and your costs
President Donald Trump said on Friday that he may stop trading with countries that run trade surpluses with the United States unless the Federal Reserve lowers interest rates. He made the remarks in the Oval Office after posting a similar message on Truth Social earlier in the day.
Trump argued that the U.S. should have the lowest interest rates in the world and pressed Federal Reserve Chair Kevin Warsh to cut borrowing costs following a strongerthanexpected August jobs report. The Fed declined to comment.
The comments intensified Trump’s pressure campaign on the central bank. Economists note that trade deficits are not automatically harmful and can reflect strong consumer demand, while countries that sell more to the U.S. often reinvest dollars in U.S. assets such as Treasury bonds. Trump pointed to Canada as an example, saying ending trade could reduce the deficit.