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Trump: Policies May Mean Economic Pain 08/21 06:09
President Donald Trump acknowledged his aggressive China trade policies may
mean economic pain for Americans but insisted they're needed for more important
long-term benefits. He contended he does not fear a recession but is
nonetheless considering new tax cuts to promote growth.
WASHINGTON (AP) -- President Donald Trump acknowledged his aggressive China
trade policies may mean economic pain for Americans but insisted they're needed
for more important long-term benefits. He contended he does not fear a
recession but is nonetheless considering new tax cuts to promote growth.
Asked if his trade war with China could tip the country into recession, he
brushed off the idea as "irrelevant" and said it was imperative to "take China
on."
"It's about time, whether it's good for our country or bad for our country
short term," Trump said on Tuesday.
Paraphrasing a reporter's question, Trump said, "Your statement about, 'Oh,
will we fall into a recession for two months?' OK? The fact is somebody had to
take China on."
The Republican president indicated that he had no choice but to impose the
tariffs that have been a drag on U.S. manufacturers, financial markets and, by
some measures, American consumers.
Trump was clear that he didn't think the nation is at risk of a recession
and that a boom was possible if the Federal Reserve would slash its benchmark
interest rate.
"We're very far from a recession," Trump said. "In fact, if the Fed would do
its job, I think we'd have a tremendous spurt of growth, a tremendous spurt."
Yet he also said he is considering a temporary payroll tax cut and indexing
to inflation the federal taxes on profits made on investments, moves designed
to stimulate faster growth. He downplayed any idea that these thoughts indicate
a weakening economy and said, "I'm looking at that all the time anyway."
Asked about his remarks, White House spokesman Judd Deere said, "The
president does not believe we are headed for a recession. The economy is strong
because of his policies."
Trump faces something of an inflection point on a U.S. economy that appears
to be showing vulnerabilities after more than 10 years of growth. Factory
output has fallen and consumer confidence has waned as he has ramped up his
trade war with China. In private, Trump and his advisers have shown concern
that a broader slowdown, if not an outright recession, could arrive just as he
is seeking reelection based on his economic record.
Trump rattled the stock and bond markets this month when he announced plans
to put a 10% tax on $300 billion worth of Chinese imports. The market reaction
suggested a recession might be on the horizon and led Trump to delay some of
the tariffs that were slated to begin in September, though 25% tariffs are
already in place for $250 million in other Chinese goods.
The president has long maintained that the burden of the tariffs is falling
solely on China, yet that message was undermined by his statements to reporters
Tuesday prior to a meeting in the Oval Office with the president of Romania.
"My life would be a lot easier if I didn't take China on," Trump said. "But
I like doing it because I have to do it."
The world economy has been slowing in recent months, and recent stock market
swings have added to concerns that the U.S. economy is not immune. A new survey
Monday showed a big majority of economists expect a downturn to hit by 2021.
Addressing that possibility, Trump focused anew on pressuring the Federal
Reserve to cut interest rates. Presidents have generally avoided criticizing
the Federal Reserve publicly, but Trump has shown no inclination to follow that
lead. Rather, he's positioning Fed Chairman Jerome Powell to take the fall if
the economy swoons.
"I think that we actually are set for a tremendous surge of growth, if the
Fed would do its job," Trump said. "That's a big if."
Trump recommended a minimum cut of a full percentage point in the coming
months.
(KR)
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