Latest posts by Andrew Moran (see all)
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It certainly appears as though President Donald Trump may be backtracking from some of his key campaign promises. According to a wide-ranging interview with The Wall Street Journal on Wednesday, the president flipped on a handful of campaign pledges, including China, monetary policy, and the Export-Import Bank. President Trump’s recent comments may further anger his base, particularly after last week’s Syrian airstrike.
China is ‘Not a Currency Manipulator’
During the 2016 presidential campaign, the real estate billionaire mogul regularly chastised China for being a currency manipulator. He accused the world’s second-largest economy of artificially devaluing the yuan renminbi to increase its exports.
Trump told the WSJ that China is not a currency manipulator, adding that the People’s Bank of China (PBOC) has been trying to prevent further weakening. It is true that the yuan has appreciated in value in recent years, but that was occurring throughout the Republican primaries when he first made those statements.
Reuters confirmed that the Treasury Department’s semi-annual report on global currency practices would not name China a currency manipulator. The report is scheduled to be released on Thursday.
Senator Chuck Schumer (D-NY) called Trump’s revised stance on China “symptomatic of a lack of real, tough action on trade.”
In reference to the U.S. dollar, the president complained that it “is getting too strong,” which he blamed on himself because “people have confidence in me.” This, he says, makes it difficult for American companies to compete in international markets.
He also wants the Federal Reserve to keep interest rates low at a time when the central bank has penciled in two more rate hikes this year.
On the campaign trail, he stated that he preferred to maintain a strong dollar policy and raise rates to help the U.S. economy. Trump further lambasted Fed Chair Janet Yellen for keeping rates artificially too low for too long, alluding to the fact that this decade-long, low-rate policy hurts seniors, savers, and average Americans.
It has been reported that Trump officials are debating on reversing the strong dollar policy put in place in the 1990s. The administration believes weakening the greenback would boost manufacturing and exports. U.S. Treasury Secretary Steven Mnuchin broke with Trump, telling The Wall Street Journal in February that a strong greenback is “a good thing.”
Will Janet Yellen be Re-Nominated Next Year?
Trump told the newspaper that he is considering re-nominating Yellen to chair the Fed’s Board of Governors next year. Despite pledging that Yellen would be “toast” when he took office, Trump confirmed that Yellen is “not toast”:
I like her. I respect her. It’s very early.
Last year, Trump had accused Yellen of boosting the stock market by making interest rates “artificially low.” He averred that stocks are surging “because you get free money.” Trump also stated Yellen’s policy positions are strictly “a political thing”:
Janet Yellen for political reasons is keeping interest rates so low that the next guy or person who takes over as president could have a real problem.
Trump did later dial that back, commenting that he doesn’t think Yellen is doing a bad job:
I’m not a person that thinks Janet Yellen is doing a bad job. I happen to be a low interest rate person, unless inflation rears its ugly head, which could happen at some point. It doesn’t seem like it’s happening any time soon. I don’t think I want to at this point – I mean, number one, she’s got time left.
I would rather have a Republican in the position, but I am not the enemy of Janet Yellen. … Look, if interest rates were raised and if the dollar went up more, we’d be doing no business. We’re being killed by other countries devaluing their currencies.
Throughout the entire 2016 presidential election, Trump flip-flopped on the Fed and Yellen.
Conservatives to be Disappointed on the Export-Import Bank
Office of Management and Budget (OMB) Director Mick Mulvaney told CNBC on Tuesday that the Export-Import Bank is “going to continue to exist.” This is a government organization that offers taxpayer-backed loans, loan guarantees, and insurance to foreign companies to purchase U.S. exports.
Trump lent his support to the Export-Import Bank by saying the bank is “a very good thing”:
It turns out that, first of all, lots of small companies are really helped, the vendor companies. Instinctively, you would say, “Isn’t that a ridiculous thing,” but actually, it’s a very good thing. And it actually makes money, it could make a lot of money.”
Conservatives have long complained that the Ex-Im Bank is an example of crony capitalism because it subsidizes corporate behemoths. For the last five years, Republican lawmakers have worked to either implement reforms or shut it down entirely. Trump had voiced his opposition – but later sent mixed signals – to the state corporation on the campaign trail.
Senator Heidi Heitkamp (D-ND) said in February that the president assured her he would soon nominate a person to get the entity’s board to a quorum, The Hill reported. This would allow it to make deals worth more than $10 million.
In twenty-four hours, Trump has flipped on several core campaign promises, including the “no longer obsolete” NATO. It is apparent that the Trump administration is shifting towards more mainstream policy positions. This is sure to irk many of his more prominent supporters because it isn’t draining the swamp like he said he would.