Trump’s Agenda: Trade Deal and Fed Decisions
This week, President Trump’s schedule includes a brief visit to Scotland, discussions on a new trade agreement, and the Federal Reserve’s rate decisions, all of which are likely to dominate his agenda.
On Sunday, Trump made headlines by announcing a trade deal involving the European Union, alongside EU Commission President Ursula von der Leyen in Scotland. Specifically, he stated that the U.S. would implement a 15% tariff on imports from the 27-member bloc, a decrease from the previous 30% rate.
Von der Leyen responded, mentioning that Europe would invest $150 billion in U.S. energy and commit to an additional $600 billion in other investments as part of this agreement.
Before these negotiations gained traction, Trump noted some unresolved matters concerning the European automotive sector and agricultural exports from the U.S. He emphasized the need for balance, pointing out the existing trade surplus in Europe versus the deficit in the U.S.
In July, plans were set for a 30% tariff on imports from Mexico and the EU, which followed recent actions on copper imports from Brazil, along with a 50% tariff on certain products. The U.S. has also imposed a 35% tariff on Canadian goods and tariffs on various products from over 20 countries. The administration has indicated that it does not foresee any extension or delay in negotiations leading up to the August 1 deadline.
Federal Reserve’s Upcoming Meeting
This week, Federal Reserve Chair Jerome Powell will lead a two-day meeting of the Federal Open Market Committee (FOMC) to discuss U.S. federal funds target rates. The FOMC is set to convene on July 29th, focusing on the monetary policy and whether to raise or lower interest rates.
Since his appointment in 2017, Powell has faced increasing pressure, especially recently, to lower interest rates to stimulate economic growth, perhaps to as low as 1%. However, Trump has previously criticized Powell’s reluctance to make such cuts, claiming it has cost the U.S. significantly. Before heading to Scotland, Trump reiterated his call for Powell to reduce interest rates, citing a strong job market and easing inflation as justifications.
