6/18/19
WASHINGTON — To President Trump, economics has always been a zero-sum game: If another country is winning, the United States must be losing. That view became clear on Tuesday, when Mr. Trump accused the European Central Bank of trying to prop up Europe’s economy and weaken its currency to gain a competitive edge over the United States. Mr. Trump directed his criticism at Mario Draghi, the bank’s president, who said in a speech on Tuesday that “additional stimulus will be required” to help Europe withstand the economic challenges it faced, including mounting protectionist threats stemming from Mr. Trump’s trade war. Those comments caused European financial markets to rally and the euro to decline sharply against the dollar. Mr. Trump, in a series of tweets, accused Mr. Draghi of deliberately pushing down the value of the euro “making it unfairly easier for them to compete against the USA.” “They have been getting away with this for years, along with China and others,” he tweeted. Speaking to reporters at the White House later in the day, Mr. Trump said Mr. Draghi “did something today that was very dramatic. And, frankly, it helped that part of the world.”
Mr. Trump is viewing international economic policies through an increasingly narrow lens, observing only how decisions will affect the United States and seeing other countries’ attempts to help their economies as working against America’s interests. He has continually accused the Federal Reserve of putting the United States at a disadvantage to China, Europe and others by raising interest rates and has urged the central bank to take steps to strengthen the American economy, including cutting rates and restarting crisis-era stimulus programs. On Tuesday afternoon, Mr. Trump suggested that he would consider demoting the Fed’s chairman, Jerome H. Powell, if the United States central bank did not also move toward easing policy. Mr. Trump has begun equating currency movements with monetary policy. Currencies do move in response to central banks’ interest rate decisions, but that is generally not policymakers’ explicit goal. Officials target measures of economic growth, not the cost of the euro or dollar. The Fed has not signaled it is prepared to go nearly as far as Europe might. Growth in the United States has moderated somewhat, but the economy remains strong. Mr. Powell indicated early this year that the Fed was pivoting away from steadily lifting interest rates, adopting a patient stance instead as markets wobbled and growth showed signs of weakening. “We do not know how or when these issues will be resolved,” Mr. Powell said of trade spats, speaking earlier this month. “As always, we will act as appropriate to sustain the expansion.”
