CA, US & World
Trump Threatens to Halt Trade With Deficit Nations Unless Fed Cuts Rates
President Donald Trump is threatening to halt trade with countries where the United States runs a trade deficit unless the Federal Reserve lowers interest rates.
Trump made the statement Friday in a post on Truth Social, calling for the Federal Reserve to cut rates and saying stopping trade with deficit countries would be preferable to tariffs.
The comments came shortly after the release of a stronger-than-expected August jobs report. U.S. employers added 162,000 jobs last month, more than twice the number economists had expected, while the unemployment rate held at 4.1%.
The stronger labor market has increased expectations that the Federal Reserve could raise interest rates at its September meeting as officials continue working to bring inflation toward the central bank's 2% target.
The Federal Reserve is scheduled to meet September 15-16. Fed officials have indicated that the latest inflation and economic data will be important in determining whether rates should be raised, lowered or left unchanged.
Trump said Friday that he speaks with Federal Reserve Chair Kevin Warsh, whom he selected to replace Jerome Powell.
The president has repeatedly pushed the Federal Reserve to lower interest rates. His latest comments came as financial markets were reassessing the possibility of a rate increase following the jobs report. Reuters reported that expectations for a September rate hike rose significantly after the employment data was released.
The United States runs trade deficits with many major trading partners. China accounted for more than $200 billion of the U.S. trade deficit last year, followed by Mexico and Vietnam, according to federal trade data cited by CNN.
Trump's proposal could have significant implications for businesses that rely on imported goods and materials. Cutting off trade with major suppliers could force companies to find alternative sources, potentially increasing costs and disrupting supply chains.
The president's comments also add another dimension to his ongoing pressure on the Federal Reserve, whose decisions on interest rates are independent of White House trade policy.
Investors are now awaiting additional inflation data, including the August Consumer Price Index report scheduled for release September 11, ahead of the Fed's September meeting.
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By: NBC Palm Springs
September 5, 2026
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