Trade War 2.0: Trump Demands Fed Lower Rate, Threatens Embargo
Trump Demands Fed Lower Interest Rate, Threatens Trade Embargo
On September 4, 2026, former President Trump demanded the Federal Reserve lower interest rates, threatening to halt trade with countries where the U.S. has a trade deficit. He argued this approach is "better than tariffs," citing a February 2026 Supreme Court ruling he claims supports his authority under the International Emergency Economic Powers Act (IEEPA). A national emergency concerning trade deficits, declared in April 2025, provides the legal basis. Speaking from the Oval Office, Trump singled out Canada, Mexico, and the EU, stating he could impose an embargo "with one stroke of a pen."
This demand comes as the U.S. trade deficit hit an 16-month high of $88.6 billion in July 2026, with major contributors being Mexico ($27.5B), Vietnam ($23.3B), Taiwan (~$18-20.7B), China ($15.2B), Germany (~$5.6-6.3B), and Ireland (~$3.9B).
The article's AI analysis draws a historical parallel to President Nixon pressuring Fed Chair Arthur Burns in 1971, which preceded high inflation and a severe recession, questioning if current pressure on the Fed risks repeating that cycle.
cryptonews.ru7h ago
