Trump dismissed plan to devalue U.S. dollar

White House trade adviser Peter Navarro presented President Donald Trump on Tuesday with ideas on how to devalue the United States dollar to gain an upper hand in the trade fight with China, two people familiar with the presentation said. But the president, who has regularly accused other countries of unfairly devaluing their own currencies, quickly shut him down and dismissed the proposals, the people added. It’s the latest example of the Trump administration’s heated internal debate over how to manage the president’s controversial trade war with China and offset a potential economic slowdown ahead of the 2020 election. Trump himself has complained in interviews and on Twitter about the strength of the dollar, arguing that it makes U.S. exports more expensive and hurts his competitive position in the bruising tariff battle with Beijing. He has laid much of the blame on the U.S. Federal Reserve, saying its interest rate hikes have caused the dollar to rise too high. But in his meeting with Navarro, Trump rejected a proposal to bring down the dollar. One person in the room said Navarro had barely begun his presentation before getting “slaughtered” by Trump. A second source briefed on the meeting confirmed this account. Navarro did not return requests for comment. The White House also did not respond to requests for comment. The meeting included many of Trump’s senior trade team, including Treasury Secretary Steven Mnuchin, National Economic Council Director Larry Kudlow and U.S. Trade Representative Robert Lighthizer. And it followed rampant speculation on Wall Street that the administration might intervene to drive the dollar lower. Money tends to move into countries with higher interest rates, pushing up the value of those countries’ currency. The Fed is widely expected to cut interest rates by a quarter point next week. Trump has also alleged that China and Europe, historically an economic ally, are keeping their currencies artificially low to boost exports. “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. 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!” Trump tweeted earlier this month. Wall Street is watching closely for any administration action to intervene in the currency market. Traditionally, presidents and Treasury secretaries publicly advocate a strong dollar as an indicator of the long-term health of the U.S. economy and the desirability of America as an investment destination. Privately, they often wish for a weaker dollar to boost exports and domestic manufacturers. Trump has been unique in his recent history in his public pining for a weaker dollar. Mnuchin last week said in an interview after a Group of Seven meeting in France that the U.S. might intervene in currency markets. “This is something we could consider in the future but as of now there’s no change to the dollar policy,” he said. But he altered that stance in a CNBC interview on Wednesday. “I do believe in a strong dollar, which signifies a strong U.S. economy, a strong stock market and particularly, because of the president’s economic policies, we have growth in the U.S. that has outpaced everywhere else,” Mnuchin said. Kudlow on Friday told CNBC the administration would not intervene to weaken the dollar. It’s not clear how the White House would try and weaken the currency. One possibility is to have Trump and other senior official talk it down in public statements. The government could also try to sell dollars and buy other currencies to try to lower the dollar’s market value. Article originally published on POLITICO Magazine Source: https://ift.tt/2LIMJw1 Droolin’ Dog sniffed out this story and shared it with you. The Article Was Written/Published By: bwhite@politico.com (Ben White) ! #Headlines, #Economy, #Money, #Political, #Politico, #Trending, #Trump, #Newsfeed, #syndicated, news https://ift.tt/2yg61Ak
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