The President of the United States, Donald Trump, issued an unprecedented warning this Friday: if the Federal Reserve does not lower interest rates at its upcoming meeting, he will stop trading with all countries with which Washington has a trade deficit.
The threat came through a message posted on his Truth Social network, hours after the Department of Labor released the employment report for August, which recorded the creation of 162,000 jobs, nearly three times what analysts expected.
«Lower the rates or I will stop trading with countries where we have a deficit!», Trump wrote on Truth Social, explicitly linking monetary policy with trade policy in a move unusual even for his style.
The president argued that the country's economic strength justifies lower interest rates and that the United States should have "the lowest rate of any country in the world, like in the old days."
He also warned that the trading partners benefiting from large surpluses with the U.S. only maintain that status because Washington allows it, and that could change immediately: "If the United States did not agree to allow them their large surpluses, something we could stop right away, they would no longer be considered a financial elite!"
Trump described trade cuts as a tool "better than tariffs" and recalled that the Supreme Court itself, despite having overturned much of his tariff framework last February, acknowledged that the president has "the absolute right" to decide with whom the largest economy in the world trades.
The threat is aimed directly at the new Fed Chairman, Kevin Warsh, confirmed by the Senate in May with 54 votes in favor and 45 against.
Trump demanded that the institution act with "intelligence" and be "patriotic," referring to Warsh, who has taken a more conservative stance than his predecessor and has prioritized reducing the central bank's balance sheet.
The Fed kept rates in the range of 3.50% to 3.75% at its late July meeting, the second one chaired by Warsh.
The implicit deadline in Trump's threat is the upcoming meeting of the Federal Open Market Committee, scheduled for September 15 and 16, when the central bank will announce its decision on rates.
Trump's trade escalation is not new. Following the Supreme Court ruling that overturned his global tariffs based on emergency powers law, he redirected his tariff policy with a global levy of 10% supported by Section 122 of the Trade Act of 1974.
In July, he expanded tariffs to 60 countries with rates between 10% and 12.5%, including the European Union, the United Kingdom, India, Japan, South Korea, and Mexico. In August, he announced a 50% tariff on Canadian vehicles and steel starting January 1, 2027.
According to an analysis by the EFE agency, markets assigned about a 41.6% probability that the Fed will keep the current range unchanged in September, reflecting the uncertainty surrounding the decision given the political pressures and conflicting economic data.
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