Trump accuses China, EU of currency manipulation, slams Fed

Trump accuses China, EU of currency manipulation, slams Fed

The IMF projects the US trade deficit will widen as tax cuts and spending increases enacted this year stoke demand for imports.

A top Federal Reserve official, meanwhile, warned the trade war could hurt the United States economy. In particular, the Fed's most recent rate hikes could dilute some of the benefit of the tax cuts Trump signed into law a year ago.

Trump's comments caused the Dow Jones Industrial Average to register a slight dip before the opening stock market bell in NY, though it then shook off the president's threat and rose again on strong U.S. corporate earnings growth.

The Fed began raising interest rates from emergency levels in 2015, under Powell's predecessor Janet Yellen.

Trump reiterated threats to impose tariffs on almost all Chinese imports to the U.S. in a CNBC interview broadcasted on Friday.

"I'm willing to go to 500", he said during a taped interview with the business channel CNBC, an escalation he was prepared to makebecause it "was the right thing to do for our country" and because the rise in stocks - the S&P 500 is up 31% since his election - allowed him to pursue a more aggressive trade policy.

The US imported $505 billion worth of goods from China in 2017, according to Census Bureau data.

Trump had earlier threatened to target up to $550 billion in Chinese products - a figure that exceeds the $524 billion in goods and services China actually shipped to the United States a year ago.

Washington also is now targeting another US$200 billion in imports which see fresh tariffs imposed as soon as September. Soybeans were the United States' biggest agricultural export to China, worth $12 billion a year ago.

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Trump's comments will make life hard for both the Treasury and the Fed, said Tony Fratto, former White House deputy press secretary under George W. Bush and founder of Hamilton Place Strategies in Washington.

"I don't want them to be scared".

Even though he's frustrated, Trump said he's "letting them do what they feel is best". "But it was very unfair".

China accused the United States of starting the "largest trade war in economic history".

CNBC said, "The Fed's independence from political interference has been a hallmark of its existence, so Trump's remarks have little precedent".

The central bank's job is to keep prices stable, including raising interest rates to prevent the economy from overheating and inflation from rising. "We have been ripped off by China for a long time, and I told that to President Xi".

"China, the European Union and others have been manipulating their currencies and interest rates lower, while the USA is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge".

However, the euro, yuan and yen all strengthened against the dollar, with the USA currency on track for its worst day of July.

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