The White House Trade Adviser, Peter Navarro, presented to President Donald Trump on Tuesday ideas for devaluing the EU US -Dollar to gain the upper hand in the trade struggle with China, said two persons familiar with the presentation.
The President, who regularly accused other countries of unfairly devaluing their own currencies, quickly closed them and dismissed the proposals , people added.
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This is the latest example of the heated internal debate of the Trump administration r, how to cope with the controversial presidential war with China and compensate for a possible economic slowdown is head of the 2020 election. Trump himself has complained in interviews and on Twitter about the strength of the dollar, arguing that this makes US exports more expensive and expensive its competitive position in the tough customs battle with Beijing impaired. He has blamed the US Federal Reserve for making the dollar too high as a result of interest rate hikes.
At his meeting with Navarro, however, Trump rejected a proposal to lower the dollar. One person in the room said Navarro had barely begun his presentation before he was "slaughtered" by Trump. A second source, informed about the meeting, confirmed this report. Navarro has not sent any comment requests back. The White House also did not respond to requests for comments.
The meeting was attended by many members of the Trump Senior Trade Team, including Treasury Secretary Steven Mnuchin, National Economic Council Director Larry Kudlow, and US Representative Robert Lighthizer. And rampant speculation on Wall Street followed that the government could intervene to lower the dollar.
Money tends to flow into countries with higher interest rates, which increases the value of the currency of these countries. It is widely expected that the Fed will cut interest rates by a quarter point next week.
Trump has also claimed that China and Europe, historically an economic ally, keep their currencies artificially low to boost exports.
"China and Europe are playing big currency manipulation games and pumping money into their system to compete with the US. We should MATCH or continue to be the idiots who sit back and politely watch other countries continue to play their games – as they have for many years! "Trump tweeted earlier this month.
Wall Street attentively observes every administrative action in the foreign exchange market. Traditionally, presidents and finance ministers are publicly advocating a strong dollar as an indicator of the long-term health of the US economy and the desirability of America as an investment destination. Privately, they often want a weaker dollar to boost exports and domestic manufacturers.
Trump was unique in his recent history when he publicly demanded a weaker dollar. Mnuchin said last week in an interview after a meeting of the Group of Seven in France that the US could intervene in the currency markets.
"This is something we could think about in the future, but there is currently no change in the dollar policy," he said.
But he changed that attitude in a CNBC interview on Wednesday.
"I do. I believe in a strong dollar that stands for a strong US economy and a strong stock market, and in particular, because of the President's economic policies, we have growth in the US above that of other countries." Mnuchin said
Kudlow on Friday CNBC the government would not intervene to weaken the dollar.
It's not clear how the White House would try to weaken the currency. "One possibility is Trump and The government may also try to sell dollars and buy other currencies to lower the market value of the dollar.