Hassett Downplays Trump Trade War Threat

Kevin Hassett, the director of the National Economic Council, dismissed President Donald Trump’s warning that a trade war would erupt if the Federal Reserve fails to lower interest rates. Speaking on Sunday, Hassett said the president’s threat was “very strong” but that it was unlikely to result in a complete collapse of trade.

Hassett added that he does not expect trade volumes to fall to zero, noting that the president’s stance hinges on the possibility of a rate cut. He emphasized that the Federal Reserve’s policy decisions remain grounded in its dual mandate of price stability and maximum employment, and that any change in rates would be based on economic data rather than political pressure.

The statement underscores the tension between the administration’s trade agenda and the Fed’s independent monetary policy. While the president’s rhetoric signals potential escalation, the economic establishment appears to view the threat as a political signal rather than an imminent policy shift.