'Cut rates or I'll halt trade': Trump threat to Fed has big implication for India
US President Donald Trump has threatened to halt trade with countries maintaining a trade surplus with the US unless the Federal Reserve lowers interest rates. Trump argues that the US economy's strength justifies cheaper credit, though economists warn that trade deficits are not directly linked to interest rate policy.
Why it matters
This ultimatum poses a significant economic risk to India, which maintains a substantial trade surplus with the US, potentially disrupting bilateral trade relations.
TOI correspondent from Washington: US President and MAGA supremo Donald Trump has turned his long-running campaign for lower interest rates into a stunning trade ultimatum: Cut borrowing costs, he warned, or Washington will stop trading with countries that have trade surplus with the US.Trump issued the threat through a social media post on Friday after a surprisingly strong jobs report showed US employers added 162,000 workers in August, more than five times the average monthly gain over the previous year.
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