Trump’s recent statements on the economy are even more bonkers than usual

Donald Trump's recent remarks about the economy have alarmed economists and business leaders, writes Steven Greenhouse in a Guardian opinion column. On Truth Social, the president threatened to stop trading with countries that run a deficit with the US unless the Federal Reserve cuts interest rates, and claimed that doing so would bring in at least $1.5tn a year. Greenhouse argues that severing trade with dozens of partners, including China, Mexico, Taiwan and the European Union, would cut off manufacturers from chips, rare earths, auto parts and aluminum, and force factories to close, according to The Guardian.

Days before the Fed lifted its short-term rates to a range of 3.75% to 4%, Trump urged it to drop them to 1% or half a percent, a step Greenhouse says would stoke inflation. Justin Wolfers, an economist at the University of Michigan, branded that demand the worst remark any president has made. Trump also suggested lower rates could produce GDP growth of up to 20%, though the economy expanded 2.2% in the second quarter and has hit 20% only once since World War II, in 2020's third quarter.

Greenhouse also faults Trump's view that a deficit is simply a loss.

Summarized by PolitiKool from The Guardian’s reporting. Read the full story at The Guardian →