Trump to Fed: Cut Rates or I’ll Halt Trade With Deficit Nations

Donald Trump has again threatened to interrupt U.S. trade with countries with which the United States has a trade deficit, citing Mexico and the European Union, after the Federal Reserve, the U.S. central bank, raised interest rates.

What Happened

Trump said he could cut trade relations with deficit countries if the Fed does not reduce interest rates. The threat was made in a post on Truth Social amid renewed pressure from the president on the U.S. central bank.

The president cited Mexico and the European Union as targets of the threat to interrupt trade. Al Jazeera reported that Trump again spoke of ending trade with Mexico, Canada and the European Union after the Fed raised interest rates.

Trump criticized the Fed’s rate increase and used social media to press for cuts. “Interest rates in the United States should be 1% or less, because we have the best credit in the world—BY FAR,” the president wrote on Truth Social.

The Federal Reserve raised interest rates by 0.25 percentage point, bringing the rate to a range of 3.75% to 4% per year. The decision was unanimous and, according to the Fed, aims to bring inflation back to its 2% target more quickly.

The American president said the strategy of interrupting trade would be “better than tariffs.” He also said the strength of the U.S. economy should allow lower financing costs and again argued that the country should have the lowest interest rate in the world.

Other Fronts

Trump threatened to impose “very heavy” tariffs on the European Union if it considers the bloc’s rapprochement with Canada to be hostile. He reacted to European Commission President Ursula von der Leyen’s proposal to make Canada an associate member of the EU, and said he could interrupt trade with Europe in various products.

The president also threatened to block sales by Canadian aircraft manufacturer Bombardier in the United States. The statement came in the context of a trade conflict with Canada, hours before Canadian tariffs on American products took effect.