Washington: Thursday’s President Donald Trump is about to launch a military coup over escalating tensions with China and says he is not satisfied with the strong dollar.
Trump officials have enacted more stringent rules, including offering tariffs on all Chinese goods since September 1, and accusing Beijing of making money for their own benefit.
Trump seems to want the dollar to weaken to help American companies compete, which has violated US law for decades.
“As your President, people will think that I enjoyed our most powerful dollar. I didn’t!” He said on Twitter.
“Compared to other countries, the high interest rate on the Fed keeps the dollar high, making it difficult for our major manufacturers such as Caterpillar, Boeing, … John Deere, our car companies and other companies to get involved.
Economists have completely denied this and that Beijing has any intrusion into the money market to prevent the economy from falling forward due to the recession and the uncertainty created by the Trump administration’s economic war.
“It’s silly to say that China is a fool. It just doesn’t bring about corruption,” said Fred Fred, Fred Bergsten, founder of the Peterson Institute for International Economics.
“As Trump said, this is fake news,” Bergsten told AFP.
But he said the move has failed to achieve a full-time war, but the risks are there.
If the government is trying to sell the dollar to weaken currency exchanges and to link Beijing with its intervention, what would make the war even worse?
“This is going to create a war effort,” Bergsten said. “Entering a war fund is a risky business. Especially the current government.”
For decades, all parties in the United States have firmly advocated for a higher dollar because it provides stability and can reduce inflation by reducing purchases.
But stronger currencies also increase US imports. Caterpillar, a manufacturer of construction and agricultural machinery, recently released its profits this year because sales in China fell during the war.
Trump has been pushing for the Fed to cut interest rates in tweets almost daily.
“With the Fed’s sharp cuts (no inflation) … the dollar will make our company win in any competition,” he said.
Trump said the central banker in the US has “made a mistake in doing anything.”
But economists strongly criticize this view and argue that the US economic power has raised the dollar in comparison to other countries, such as the euro decline.
They say the Trump administration’s war has been exacerbating the uncertainty that has prompted companies to shut down businesses, and consumers want safe havens, including buying dollars.
In a nutshell, “If your economy is bigger than the next economy, you might have a stronger currency,” James Fedad, a policy maker at the Federal Reserve this week, said.