Trump’s Dollar Angst Overlooks Trade as a Bigger Factory Concern

(Bloomberg) --

President Donald Trump’s complaints that a strong dollar is hurting manufacturing overlook a far bigger concern at America’s factories: his trade policies.

At a meeting Monday with Federal Reserve Chairman Jerome Powell, “I protested fact that our Fed Rate is set too high relative to the interest rates of other competitor countries. In fact, our rates should be lower than all others (we are the U.S.). Too strong a Dollar hurting manufacturers & growth!” Trump tweeted late yesterday.

One reading of Trump’s Twitter post suggests he wants the Fed to broaden its practice of targeting monetary policy at the domestic economy to include international competition. Another would be to indicate he’s unaware that tariffs and other trade restrictions are a bigger concern that the current level of the U.S. currency.

According the most recent quarterly survey of the National Association of Manufacturers, trade uncertainties were the second-biggest concern on a list of challenges, with more than 63% of respondents ranking it their primary worry.

The strengthened dollar ranked as eighth, with some 26% of companies mentioning it. It also showed that 70% of respondents picked attracting and retaining quality workers as the No. 1 challenge for the eighth straight survey.

The poll of 448 manufacturers was conducted in the two weeks through Sept. 4. The Bloomberg Dollar Spot Index is down about 0.7% since then.

A week ago, in a speech to the Economic Club of New York, Trump downplayed the damage that the trade war has inflicted on industrial sectors.

“They haven’t been hurt,” he said in response to an audience member’s question. “They were totally down. Now they are a little bit down because a little big, perhaps, the uncertainty of trade wars. But there is no uncertainty.”

Trump defended his approach, saying the real cost “would be if we did nothing.”

To contact the reporter on this story: Brendan Murray in London at brmurray@bloomberg.net

To contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Zoe Schneeweiss, Andrew Atkinson

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