President Donald Trump on Thursday called on the Federal Reserve to take steps to weaken the U.S. dollar, a move that would make American exports more competitive in world markets while increasing prices on imported goods.
In a series of tweets, the president ripped China after the country’s central bank devalued its currency. The move was widely seen as retaliation for Trump’s announcement last week that he would impose a 10 percent tariff on $300 billion in Chinese products.
“As your President, one would think that I would be thrilled with our very strong dollar. I am not!,” the president wrote. “The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing … John Deere, our car companies, & others, to compete on a level playing field.”
“China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation,’ ” the president tweeted. “Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”
“With substantial Fed Cuts (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition,” the president said Thursday. The Fed cut rates last week and ended the gradual shrinking of its balance sheet, which President Trump calls quantitative tightening.
“There isn’t a lot of experience in responding to global trade tensions,” Federal Reserve Chairman Jerome Powell said Wednesday. “They evolve in a different way, and we have to follow them.”