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Trump has private concerns about the economy despite public confidence



On the table are new tax cuts, a new impetus for the final approval of the new North American trade pact and increased pressure on the Federal Reserve to cut interest rates. In what officials describe as an "all hands on deck" initiative, Trump and top aides – including son-in-law and senior advisor Jared Kushner – called on business leaders to update them on the state of trade talks in China and other economic efforts in trying to calm down.

Trump has instructed associates to be prepared to be prepared this fall if economic warning signs turn worse.

At the same time, the President has taken new and sometimes confusing steps to project confidence on an issue that he knows will likely determine his chances of a second term. And there are fears that time is running out.

The new fight reflects the real situation in the White House: The booming economy that Trump has repeatedly driven during his time in office may not continue until Election Day 2020.

The irony is that much of the last warning signs displayed in the economy are the result of the President's own trade war. New tariff circles announced for China over the past few weeks have frightened markets and heightened uncertainty amid declining levels of business investment.
  Bad economic news raises political risks for Trump
On Friday, the government announced that US companies added 130,000 jobs in August, a solid number, but one that is still below expectations. As wages continued to rise, the total number of jobs added in the previous two months was revised by 20,000. The economy received jobs for 107 consecutive months, but the pace of hiring has slowed recently.

Hot on confidence design, Trump on Thursday tweeted "Really good jobs!" – despite the monthly work report coming out 24 hours later. The message was later explained by aides as a reference to a separate report that showed rising salaries for private employers, though initially employees admitted they were unsure of what Trump was referring to.

The episode echoed from his allegations a week earlier that he had made phone calls with Chinese officials that did not happen the way he claimed – the praised aides were initially confused and later admitted to having to stimulate markets.

Not deviating from Chinese tariffs

Even as Trump squeezes aid to develop consumer confidence plans, there are few indications that he is ready to take the one step that could take the most big effect: easing the trade war with China. Instead, he insists that the US is able to prevail in opposition, even when there are emerging signs of trouble.

This week's numbers showed that US manufacturing shrunk for the first time in three years this summer. Although one month is not a trend, it was another data point suggesting a steady decline in US factories.

On Wednesday, negotiators from the US and China spoke by phone to settle the next round of talks, which are now expected to begin in early October. It was accepted by Wall Street as a sign of progress, although initially the talks were intended to take place a month earlier. The development came after weeks of apparent impasse, with neither party settling on the dates or deadlines for the next meeting.

Trump has pressured his trade team to step in the negotiations, even when he does not want to give in to the Chinese demanding to raise tariffs. Instead, Trump raised privately the idea of ​​dramatically increasing tariffs on China in an attempt to force the country's hand, according to people familiar with the talks.

Even some Trump aides have tacitly acknowledged that ending the trade fight will be the single biggest step to boosting the economy. In particular, Trump has begun to acknowledge that a protracted trade war may not be a profitable political strategy, but it is nevertheless the right thing for the country, according to the man who talked to him.

But there are few who remain in the inner circle of the president, ready to warn of an escalation of the trade war, according to current and former administration officials, leaving the strongest voices – like Commerce Advisor Peter Navarro – with the greatest influence .

Those who opposed the tariff regime, such as then-Chairman of the National Economic Council Gary Cohn or chairman of the Council of Economic Advisers Kevin Hasset, left. Kushner and Treasury Secretary Stephen Mnuchin, who took a moderate stance in China's domestic debate, are now more likely to quell their arguments with Trump, according to people familiar with the matter.

"I think there is also a sense of reality that you cannot change someone's opinion about something they have believed in for 30 years and you are not really interested in hearing facts," said a former senior official of the administration.

Trump now finds himself drawn to separate directions for China: either give in to a smaller deal and look weak, or remain rigid in tariffs and cause additional economic uncertainty. Both options could be detrimental to politics, prompting Trump to look for other ways to boost the economy.

"You have to notice some victories and give the economy stability in other ways, but stay with China until it's right," said Clay Wilms, a former White House sales associate and partner at Akin Gump.

Impatient for NAFTA Replacement

The problem is that many of these victories require an act of Congress, which is true of the President-negotiated North American Trade Agreement (USMCA) pending ratification of Congress for months.

Republican allies and pom Private congressional officials have expressed hope that amid economic uncertainty, Democratic members in the constituencies Trump won will pressure Cabinet Chairman Nancy Pelosi to advance the new North American trade pact after lawmakers return from vacation. 19659025] Trump's replacement of NAFTA would have a modest but positive impact, finds a report ” data-src-mini=”//cdn.cnn.com/cnnnext/dam/assets/181130130629-03-g20-1130-free-trade-small-169.jpg” data-src-xsmall=”//cdn.cnn.com/cnnnext/dam/assets/181130130629-03-g20-1130-free-trade-medium-plus-169.jpg” data-src-small=”http://cdn.cnn.com/cnnnext/dam/assets/181130130629-03-g20-1130-free-trade-large-169.jpg” data-src-medium=”//cdn.cnn.com/cnnnext/dam/assets/181130130629-03-g20-1130-free-trade-exlarge-169.jpg” data-src-large=”//cdn.cnn.com/cnnnext/dam/assets/181130130629-03-g20-1130-free-trade-super-169.jpg” data-src-full16x9=”//cdn.cnn.com/cnnnext/dam/assets/181130130629-03-g20-1130-free-trade-full-169.jpg” data-src-mini1x1=”//cdn.cnn.com/cnnnext/dam/assets/181130130629-03-g20-1130-free-trade-small-11.jpg” data-demand-load=”not-loaded” data-eq-pts=”mini: 0, xsmall: 221, small: 308, medium: 461, large: 781″ src=”data:image/gif;base64,R0lGODlhEAAJAJEAAAAAAP///////wAAACH5BAEAAAIALAAAAAAQAAkAAAIKlI+py+0Po5yUFQA7″/>

Inside the White to m, there is a growing consensus that, if the measure is adopted before November 2020, political fears will hamper any movement until election day.

"I think the longer we wait, the harder it gets," said Phil Cox, co-chair of the Bilateral Trade Workshop for America, which is working to pressure lawmakers to pass the USMCA. "We certainly want to not fall into the heart of the presidential campaign, which means we have to do it in the next few months and certainly before the end of the year."

Throughout much of the year, the White House has helped say that passing The USMCA is their top legislative priority – just to see the agreement fall into a Democratic "working group" as non-likelihood members. White House advisers see the successful passage of the USMCA as an easier victory than reaching a trade deal with China – and believe it can favor negotiations with China by demonstrating Trump's negotiating model.

Fed Focused

[19659002] Yet, while Trump himself advocates for a trade deal in North America periodically, it's without the same fervor as his public comments on trade with China. This is deliberate, according to people familiar with the matter, who said that holding Trump as the public face of the agreement would likely alienate the Democrats themselves needed to pass it.

Instead, Trump has spent his time criticizing the Federal Reserve and stepping up war with its chairman, as markets faltered in August.

"Where did I find this guy Jerome?" Trump tweeted on Friday to his Fed chairman Jerome Powell, who came recommended by Mnuchin in the fall of 2017. "Oh well, you can't win them all!"

Trump has asked the Fed to cut interest rates further, and the central bank will have the opportunity to do so at its next meeting in mid-September – which may buy Trump some time as his team works through ideas to prevent delays.

It's all right

Among these ideas is a new tax plan, though another one is focused on the middle class. After tax cuts for 2017 were thrown as a boon for the wealthy, Trump insisted that any new steps are considered more beneficial to working people.

This has led some advisers to look into a payroll tax cut that would have a greater impact on working Americans. Trump has not given up on the move, but has been debating whether the cuts may be needed in the coming months.

The aides also weighed in on a proposal from Senator Rick Scott, a Florida Republican, who proposed tax cuts of the same amount as those charged by China. But the specifics of the measure are not conclusive, and like other steps that would seek to reduce taxes on working Americans, they would likely seek congressional approval.

While all this is stirring, the White House continues to project a public sense of "What, I'm worried?" as far as the economy is concerned.

"We have no immediate urgency," Kudlow National Economic Council Chairman Larry Kudlow said Friday. "There is no anti-recession policy because we do not see a recession."


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