Against the backdrop of mounting evidence that the global economy is weakening, President Trump is caught between his desire to pursue the trade war with China he promised to win and his need to keep the economy humming as the 2020 election approaches.
That conflict explains some of the messaging from Mr. Trump in public and on social media in recent days as market gyrations undermine the confidence of investors.
The president has insisted that his tariffs on Chinese imports are hurting only China, telling reporters on Thursday that “the longer the trade war goes on, the weaker Chinagets and the stronger we get.” The main thing threatening American prosperity, he has said repeatedly on Twitter, is the Federal Reserve and its refusal to act expeditiously to lower interest rates.
But economists say the tariffs are causing damage unacknowledged by the administration, with slowing growth in China and an economic downturn in Germany, a big exporter to China, becoming apparent this week. Sticking with the trade war could bet the health of the economy on the Fed’s ability to provide a sufficient buffer if a global downturn sets in.
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