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.
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
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
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″/>