Trump blames China, EU for currency manipulation, tells US to match

Trump blames China, EU for currency manipulation, tells US to match
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President TrumpDonald John TrumpMarine unit in Florida reportedly pushing to hold annual ball at Trump property Giuliani clashes with CNN's Cuomo, calls him a 'sellout' and the 'enemy' Giuliani says 'of course' he asked Ukraine to look into Biden seconds after denying it MORE on Wednesday accused China and the European Union of manipulating their currencies and appeared to ask the Federal Reserve to follow suit by weakening the value of the U.S dollar. 

In a Wednesday tweet, Trump ripped China and the European Union for “playing big currency manipulation game” and said that the U.S. should match as the president pressures both to increase their purchases of U.S. goods. 

Trump did not explicitly mention the Fed, which is responsible for controlling U.S. monetary policy, but the president has frequently bashed the central bank for refusing to aid his trade talks.

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“China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA,” Trump tweeted. “We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years!”

Despite Trump’s claims, the Treasury Department has declined to label either China or the European Union as manipulators in each of its annual reports on foreign currency policy issued since 2017.

Trump’s tweet came hours after the Commerce Department released data showing in May a massive jump in the U.S. trade deficit, which the president has struggled to narrow.

The president has also expressed frustration for weeks with European Central Bank President Mario Draghi, who announced last month that the bank may cut rates if the EU economy continues to slow. 

Trump insists that the European and Chinese central banks have cut interest rates to undercut U.S. exporters and has called on the Fed to do the same. He has blasted the Fed throughout 2018 for raising interest rates, which tends to strengthen the value of the dollar. 

Trump instead wants the Fed to weaken it through rate cuts and monetary stimulus, since a weaker dollar makes U.S. products relatively cheaper to foreign buyers. But the Fed is legally mandated to target only inflation and unemployment, not exchange rates, through monetary policy.

Fed Chairman Jerome Powell, a source of ire for Trump, said last month that the central bank wouldn’t target the dollar and that responsibility for foreign exchange falls to the Treasury Department.

"The Treasury Department — the administration — is responsible for exchange rate policy, full stop,” Powell said on June 25. “We don’t comment on the level of the dollar. We certainly don’t target the level of the dollar. We target domestic economic and financial conditions as other central banks do.”