Politics: Economic Trouble Signs Hang Over Trump’s Trade War - PressFrom - US
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PoliticsEconomic Trouble Signs Hang Over Trump’s Trade War

14:45  16 august  2019
14:45  16 august  2019 Source:   nytimes.com

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WASHINGTON — Against the backdrop of mounting evidence that the global economy is weakening, President Trump is caught between his desire to pursue the trade war with China he promised to win and his need to keep the economy humming as the 2020 election approaches.

WASHINGTON — Against the backdrop of mounting evidence that the global economy is weakening, President Trump is caught between his desire to pursue the trade war with China he promised to win and his need to keep the economy humming as the 2020 election approaches.

WASHINGTON — Against the backdrop of mounting evidence that the global economy is weakening, President Trump is caught between his desire to pursue the trade war with China he promised to win and his need to keep the economy humming as the 2020 election approaches.

Economic Trouble Signs Hang Over Trump’s Trade War© Lexey Swall for The New York Times The Federal Reserve has been accused by President Trump of doing too little to push economic growth.

That conflict explains some of the messaging from Mr. Trump in public and on social media in recent days as market gyrations undermine the confidence of investors.

The president has insisted that his tariffs on Chinese imports are hurting only China, telling reporters on Thursday that “the longer the trade war goes on, the weaker China gets and the stronger we get.” The main thing threatening American prosperity, he has said repeatedly on Twitter, is the Federal Reserve and its refusal to act expeditiously to lower interest rates.

Japan's trade surplus with US soars ahead of talks

Japan's trade surplus with US soars ahead of talks Japan's politically sensitive trade surplus with the United States grew more than 15 percent in July, data showed Monday, as negotiators from the two economic powerhouses prepare to restart talks over a free trade deal. The data showed that Japan had an overall trade deficit of 249.6 billion yen last month, a 9.8-percent increase year-on-year. Japan's trade deficit with China -- the 16th consecutive monthly deficit -- stood at 383.8 billion yen. With the European Union, Japan booked a trade deficit of 67.9 billion yen.

Sticking with the trade war could bet the health of the economy on the Fed’ s ability to provide a sufficient buffer if a global downturn sets in. After the German and Chinese economic reports, the bond market responded with trading patterns that have often presaged a recession.

On Tuesday, President Trump blinked in the trade war with China, retreating from previous plans to The trade war is just one piece of it. Sure, forestalling the latest China tariffs will help avoid a big hit A tactical retreat here and there won’t solve the deeper problems hanging over the world economy .

But economists say the tariffs are causing damage unacknowledged by the administration, with slowing growth in China and an economic downturn in Germany, a big exporter to China, becoming apparent this week. Sticking with the trade war could bet the health of the economy on the Fed’s ability to provide a sufficient buffer if a global downturn sets in.

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“The president seems to be playing a dangerous game,” by stirring “stuff up just enough to get the Fed to cut interest rates,” said Phil Levy, the chief economist at Flexport, a freight company.

Official administration forecasts continue to project that the economy will grow even faster this year than it did last year, when it was fueled by tax cuts. That outlook is rosier than any mainstream private forecaster has offered. Several forecasters have increased the odds of a recession’s hitting next year.

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Trump admits his trade war could lead to recession, but says ‘I have to do it’ Trump has spent days arguing this is a media creation. But on Tuesday, he suggested it might just be the price of doing the much-needed business of his trade war.

Between the US president-elect’ s campaign promises of tariffs to his phone call with Taiwan, Trump has frequently rattled Beijing. But is it bluster, or a sign of a seismic global economic shake-up?

US President Donald Trump has shaken the foundations of global trade , slapping steep tariffs on billions of dollars' This puts the world's largest economies at each other's throats. But what is a trade war ? It has also pledged to take "necessary countermeasures" over Trump ' s latest proposed tariffs.

After the German and Chinese economic reports, the bond market responded with trading patterns that have often presaged a recession. And economic data from the United States on Thursday showed that industrial production declined in July and that the manufacturing sector had shrunk over the last year.

Outwardly, administration officials have been sanguine. A senior administration official said in an interview on Wednesday evening that analysts and investors were “going overboard” on recession fears. The administration points to economic data underscoring the strength of the American consumer, like retail sales numbers released on Thursday morning. The figures showed consumers spent at a hotter pace in July than expected, driven in part by a sale for Amazon Prime members.

In an email on Thursday, the acting chairman of the White House Council of Economic Advisers, Tomas Philipson, said, “The U.S. economic outlook remains strong despite slowing global growth.” He cited the strength of the services sector, which makes up the bulk of the American economy, and strong consumer spending powered by increased wage and productivity growth.

RNC ramps up ground game to bolster Trump campaign in key states

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Before those talks could begin, President Trump ' s administration announced higher tariffs on Chinese imports INSKEEP: OK, so they've got economic trouble . And even if Americans - consumers pay the price Whether it's a trade war or an actual war, I just hope both sides will resolve it peacefully.

If the trade war escalates — and Mr. Trump has shown no sign of backing down — some worry that the public’ s faith in the economy The worry is that prolonged trade tensions could cause money to rush out of China despite currency controls and prompt much bigger financial and economic troubles .

Still, White House officials were paying close attention to the movements of the bond market on Thursday for additional signs of strain, according to a person familiar with the matter.

Officials said they remained hopeful that the economy could still meet the administration’s growth targets if they continued their deregulation efforts, if Congress passed a new trade deal with Canada and Mexico, and if some kind of agreement was reached with China.

On Twitter on Thursday, Mr. Trump cited the economy’s health while accusing journalists of “doing everything they can to crash” it. He insisted it was too strong for that to happen.

Peter Navarro, the White House trade adviser, told Fox News on Wednesday that the “underlying fundamentals of the U.S. economy are solid as a rock” but criticized the Fed for keeping interest rates too high. He said Mr. Trump’s decision this week to delay putting some tariffs on Chinese goods would, by helping to keep consumer prices in check, “give the Federal Reserve more room to run in terms of lowering rates.”

'I am the chosen one,' Trump proclaims as he defends trade war with China

'I am the chosen one,' Trump proclaims as he defends trade war with China The president's remark followed a string of criticisms aimed at his predecessors, whom he claimed had ignored China's alleged malpractice on trade. "This isn't my trade war, this is a trade war that should have taken place a long time ago," Trump told reporters outside the White House. "Someone had to do it," the president said. He added, while looking to the sky: "I am the chosen one." Earlier Wednesday, Trump retweeted a right-wing pundit's flattering, messiah-flavored comments about the president's support in Israel. "The Jewish people in Israel love him like he's the King of Israel.

Evidence is mounting that the US-China trade war is dealing a blow to the American stock market.

In a presidential memorandum signed by Trump on Thursday, there will be a 30-day The inevitable fall in demand from a full-blown trade war would spell trouble for all economies supplying the Low hanging fruit. Alarm over Trump ’ s protectionist leanings mounted earlier this month after he

When Mr. Trump postponed the planned duties on electronics and toys, softening the full force of his next round of tariffs on $300 billion of Chinese imports, he cited the potential impact on consumers heading into the holiday shopping season. But some of his advisers and aides immediately started thinking about how the move would play out at the Federal Reserve, according to people familiar with the discussions.

The theory was this: The tariff delay, by helping hold down inflation, might make the Fed more likely to cut interest rates. Mr. Trump often says lower rates would put the United States on a more level playing field with global competitors, many of which have rock-bottom borrowing costs that keep their currencies comparatively cheap, an advantage for exporters.

Delaying some of the tariffs, however, may actually have taken pressure off the Fed to act by increasing the chances that China and the United States will reach some sort of a deal before the full set of penalties take effect. In fact, while Wall Street forecasts had begun to point to a half-percentage-point rate cut in September, expectations of just a quarter-point cut increased after the tariff delay was announced.

Fed policy was not crucial to the decision to delay tariffs — that centered on consumers and the economy, according to people familiar with the deliberations — but the report that it is on advisers’ minds is noteworthy. It suggests that for at least some White House advisers, one consideration in shaping and selling trade policy is keeping the central bank pointed toward interest-rate cuts.

As economic warning signs flash, Trump, Democratic rivals recalibrate messages

As economic warning signs flash, Trump, Democratic rivals recalibrate messages President Donald Trump is test driving a new message on the economy: Any chance of a recession is not his fault. But Democrats seem to be saying "not so fast." Trump has moved from touting positive economic indicators since his 2016 election to now trying to blame someone else for a possible economic slowdown, while his advisers and officials are scrambling to insist there is nothing to worry about. From the moment he was elected, Trump took credit for the strong economy. Until early 2019, advisers saw it as the biggest selling point for his campaign to be reelected president in November 2020.

Stocks in Asia plummet after signal that US will hike import tax to 25%, dealing blow to hopes of a lasting deal.

Trump administration officials have played down the economic impact of the trade battle. “The U. S . can afford a trade war relatively more than Europe, China” and other countries because its economy is more Of course, Europe’ s troubles could redound back on the U. S . if the euro weakens against the

The Fed cut rates in July for the first time in more than a decade, partly in response to mounting risks from the trade war and a global economic slowdown. It signaled that it might make further cuts if global risks persisted and inflation stayed low.

Administration economists have continued to predict, as recently as July, that the economy will grow at a 3.2 percent rate this year, up from 2.5 percent last year. (Officials will complete a revised forecast at the end of October.) But if economic growth continues at its current pace through the fall, Mr. Trump will need a rapid acceleration — to more than 5 percent growth in the fourth quarter — to hit his administration’s initial target for this year.

On Wednesday, Mr. Trump wrote on Twitter: “China is not our problem, though Hong Kong is not helping. Our problem is with the Fed. Raised too much & too fast.”

But the main threat to United States growth, most economists say, is slowing economic expansion abroad and the possibility that Mr. Trump’s trade war will intensify the global pullback and chill investment and expansion domestically.

“I don’t know if he’s necessarily doing this just to get the Fed to cut,” said Gennadiy Goldberg, senior United States rates strategist at TD Securities, but the trade war “puts the Fed between a rock and a hard place,” because it wants to avoid playing into politics but must also protect the economy.

It is possible that Mr. Trump could extract the rate cuts he would like by escalating his dispute with China further, imposing even more tariffs. The president hinted on Thursday that such a course was possible.

“We would be able to step it up,” he said. “I’ve been very mild about it, very, very mild. There’s a long way I can go.”

Alan Rappeport contributed reporting.

Trump takes time out of G7 meeting to lash out at media.
President Trump repeatedly took aim at media coverage of him during his meeting with the Group of Seven (G-7) countries in France over the weekend, as he faces international blowback from tariffs leveled against China and the specter of a possible recession. © Getty Images Trump takes time out of G7 meeting to lash out at media The topics the president tweeted were misrepresented by news media ranged from discussions with world leaders in Biarritz to referring to himself as the "the chosen one" to deal with Chinese trade.

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