"No More Trade?": Trump Uses Trade as Leverage to Pressure Fed

[Anchor]

US President Donald Trump has stated that if the benchmark interest rate is not lowered, he will "stop trading with countries with which the United States currently has a trade deficit." Trump, who has been pressing for rate cuts, is now using trade as leverage to pressure the Federal Reserve.

Reporting from New York, here is correspondent Kim Hyunwoo.

[Reporter]

On Friday, local time, better-than-expected US employment data for August was released.

Nonfarm payrolls increased by 162,000 from the previous month, roughly triple what experts had forecast.

Analyses followed that stable employment could boost consumption, which in turn might stimulate inflation and prompt the Fed to raise interest rates this month.

Amid news that interest rates could rise, all three major New York stock indices closed lower on Friday local time.

Mentioning the employment data on social media, President Trump argued that as America's credit rating has improved, interest rates should be lowered.

He stated that if the Fed does not cut interest rates, he will halt trade with countries running a trade deficit with the US.

Specifically naming Mexico, the European Union, and Canada as trade deficit nations.

[Donald Trump / US President: The easiest way to reduce a trade deficit with a specific country is to stop trading. Canada is a prime example. They conduct almost all of their trade with the United States.]

When Fed Chair Kevin Warsh, whom he appointed, recently made remarks hinting at an interest rate hike, Trump once again resorted to using trade as leverage to exert pressure.

At the same time, with national debt reaching 40 trillion dollars, the move is also intended to reduce the burden of interest payments.

[Donald Trump / US President: If interest rates go up by 1 percentage point, interest costs increase by 650 billion dollars (approx. 876 trillion won). Our benchmark interest rate should be 1% or 0.5%.]

Local media pointed out that the US runs trade deficits with dozens of countries, noting that cutting off trade is extreme and could inflict severe damage on the economy.

(Video reporting: Lee Hee-hoon, Video editing: Kim Ho-jin)

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