Trump denies fallout from tariffs
He says ‘badly run’ firms are to blame for economic slowdown, and claims farmers back his trade wars.
“If the Fed would cut, we would have one of the biggest Stock Market increases in a long time,” Trump tweeted. “Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management ... and who can really blame them for doing that? Excuses!”
The president canceled a weekend trip to Poland in order to monitor Hurricane Dorian, which threatens his numerous properties in Florida. But he remains preoccupied with the possibility of an economic slowdown or even a recession appearing on the horizon as he’s heading into a reelection campaign.
Friday’s comments continued a stretch of days in which Trump has been present mainly on Twitter — blasting out seven missives about the economy, defending his trade war with China and once again criticizing the Federal Reserve for not taking more dramatic action to stimulate the economy.
“We don’t have a Tariff problem (we are reigning in bad and/or unfair players), we have a Fed problem,” Trump tweeted. “They don’t have a clue!”
Behind closed doors at the White House, Trump and aides have engaged in several conversations this week, some of them more tense than others, about what action they might ultimately take on the economy, according to multiple aides.
“There’s real frustration and some concern, obviously, about what could happen if this goes the wrong way,” a senior White House official said on condition of anonymity. “And there’s a sense that we have to message on this hard because the media is going to focus on any bit of bad news.”
Earlier this week, a new poll indicated, for the first time in Trump’s presidency, that more Americans believe the economy is getting worse, 37%, than better, 31%. The same Quinnipiac University survey showed Trump losing by substantial margins to all five of the top-polling Democratic presidential candidates.
The president’s messages this week have amounted to a mix of blame-shifting and cheerleading to convince the public that the economy is still booming and that a deal with China is suddenly within reach. Both fly against facts to the contrary: The unemployment rate remains low, but job growth has slowed, and there’s no evidence that the Chinese are ready to accept Trump’s terms for resolving the trade conflict.
As he left the White House for Camp David on Friday evening, Trump told reporters that the economy is “doing great” and that the additional 5% tariffs that he has ordered on $300 billion in Chinese imports are set to take effect on Sunday, as planned.
“The economy is amazing, actually,” he said. “Worldwide, we’re the No. 1 by far.”
Repeating his morning tweet, Trump said that “a lot of badly run companies are trying to blame tariffs.”
“It’s not the tariffs. It’s called bad management,” Trump said. “The tariffs have put us in an incredible negotiating position.”
Trump also said that American farmers “are very happy” that he continues to take a tough approach with trade negotiations.
Many farmers have reported being hurt economically by China’s retaliatory tariffs, and lawmakers from farm states have been increasingly nervous about Trump’s policies.
“They want me to continue this fight,” Trump said. “The people who support me most are the farmers.”
Two of Trump’s tweets Friday suggested he may be reconsidering an idea he seemed to rule out just days ago: He retweeted a tweet from the Club for Growth, a conservative group, which called for indexing capital gains. And he quoted a similarly encouraging tweet from Steve Forbes, asking: “An idea liked by many?”
Trump has gone back and forth over the last 10 days on the subject of indexing capital gains taxes to the inflation rate, which could reduce the taxes that investors pay on profits from the sale of stock or other assets. Some legal experts believe the administration could change the rules on indexing by regulation, bypassing Congress, but others dispute that.
Last Tuesday he said he was considering the idea, but the next day he told reporters it was probably off the table, noting that almost all of the tax benefits of indexing would go to the wealthy.
“I’ve studied indexing for a long time and I think it will be perceived — if I do it — as somewhat elitist. I don’t want to do that,” Trump said to reporters at the White House last Wednesday. “I think indexing is really probably better for the upper-income groups.”
While Trump’s contradictory statements only add to the uncertainty affecting markets, one effort aimed at settling them has now been revealed to have been based largely on a falsehood.
After ratcheting up tensions with China a week ago before traveling to France for the Group of 7 summit — a move that caused markets to tumble — Trump told reporters Sunday morning that he’d spoken overnight with Chinese officials who were suddenly interested in resolving the months-long trade dispute.
When reporters pressed for more specifics after a spokesman for China’s foreign minister said Beijing was unaware of such a phone call, Trump and Treasury Secretary Steven T. Mnuchin wouldn’t say whom they had spoken with, but insisted that “communication” had taken place “at the highest level.”
This week, two administration sources conceded privately that there was no such call. Trump, looking to stem a stock market slide, based his claims largely on a public statement from China’s Vice Premier Liu He that Trump took as a positive sign, they said.
On Friday as he left the White House, Trump was far less certain about the state of U.S.-China talks, telling reporters that he believed the next scheduled talks between the two sides were still on for September.
“They haven’t been canceled,” he said.