As financial markets tumbled again Wednesday over concerns about a trade war with China and unrest in Hong Kong, President Donald Trump took to Twitter to request a one-on-one meeting with Chinese President Xi Jinping.
The tweet appeared to be the latest effort by Trump to get a hold of jittery markets in which investors are concerned about the administration's relationship with China and an ongoing trade dispute that shows little sign of ending.
"I have ZERO doubt that if President Xi wants to quickly and humanely solve the Hong Kong problem, he can do it," Trump said of escalating unrest in Hong Kong over Beijing's threat of a crackdown on protests there. "Personal meeting?"
Trump's offer of a private meeting capped a string of efforts by the administration on Wednesday to separate the stubborn trade talks from the plunging market and blame it instead on the Federal Reserve. The remarks came after markets plunged for the second time this week. The Dow Jones Industrial Average lost 800 points, or 3.05%, Wednesday. The numbers represented the worst percentage drop for the Dow this year.
"We are winning, big time, against China,” Trump wrote on Twitter, despite few signs of progress in negotiating a new trade agreement with China. “Prices to us have not gone up, and in some cases, have come down.”
Trump has staked much of his re-election messaging on the strength of the U.S. economy, and has frequently bragged about stock market increases since his election. But the president also has repeatedly returned to the idea that the economy would be even better were it not for the Federal Reserve, and specifically its chairman, Jerome Powell. Trump has leaned on the Fed to lower interest rates more quickly.
Analysts say fears of a global slowdown likely contributed to Wednesday's stock market downturn.
“The tweets make the president look rattled,” said James Pethokoukis, a policy analyst at the conservative American Enterprise Institute. “It’s clear the most positive thing the president can do is suggest he’s ready to wind down the trade wars.”
A day earlier, Trump announced he would delay until Dec. 15 tariffs on Chinese goods that were supposed to go into effect in September. Trump said he made the move to prevent his tit-for-tat tariff war from having an impact on the holiday shopping period in the U.S., a tacit recognition that the trade battle could affect U.S. consumers.
The president returned to China in a series of tweets later Wednesday, after markets closed, arguing that Beijing, not the U.S., had felt the pinch of tariffs.
"They are eating the Tariffs with the devaluation of their currency and 'pouring' money into their system," Trump said of China.
The president also pushed back on recent criticism that he has softened his rhetoric on China's crackdown on unrest in Hong Kong in exchange for considerations in the trade debate. Protesters, upset over Beijing's involvement in Hong Kong, brought air traffic at the city's bustling airport to a halt this week.
"Of course China wants to make a deal," Trump said. "Let them work humanely with Hong Kong first!"
Trump’s past meetings with Xi have been described by White House officials as productive but have not led to a free trade agreement. Trump last met with Xi during the G-20 meeting in Osaka, Japan, in June. Before that, he and Xi talked trade over a steak dinner at the G-20 meeting in Argentina at the end of 2018.
Aides for both countries have held a series of follow-up meetings, but have yet to produce substantive progress toward an agreement to end the tariff dispute.
Gordon Gray, director of fiscal policy at the center-right American Action Forum, speculated that Trump "is anxious to deflect any blame on this front" and that Powell is a convenient target.
"There is no coherence to the president’s approach to tariffs – on the one hand Americans aren’t paying them, yet on the other, they should be spared from the harm at Christmas," Gray said. "Honestly, if the administration could just pick one analytical framework and stick to it, no matter how flawed, that would at least improve how market actors perceive the administration’s trade actions."
Administration officials took to cable news and Twitter throughout the day Wednesday to defend the administration’s stance on China, which has won some bipartisan support on Capitol Hill. Even some critics of the president’s trade policies have complained about China’s trade barriers, particularly in the technology sector.
Trump "pays attention to growing this economy by building things... China should pay attention to that," White House director of trade policy Peter Navarro told Fox Business on Wednesday. "The president grows this economy, that's what he focuses on."
Instead of blaming China, Trump turned to a familiar target: The Federal Reserve. The president has complained the Fed has not lowered interest rates quickly enough.
"China is not our problem, though Hong Kong is not helping," Trump said. "Our problem is with the Fed." Trump specifically criticized Powell, describing the Fed's chairman as "clueless." Trump has repeatedly blasted Powell, whom he named to the job in 2018.
The Fed, an independent board whose members are appointed by the president, raises interest rates to cool down a hot economy and cuts them to stimulate a sluggish one. The rates affect how much it costs to use a credit card, get a car loan or obtain a home mortgage.
Analysts said the main factors driving the markets Wednesday were reports that Germany, Europe’s largest economy, contracted 0.1% in the second quarter of the year in part because of global trade disputes and trouble with the auto industry.
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