Trump says the Fed can help "win" trade war with China

  US President Donald Trump speaks to the media during a meeting with Hungarian Prime Minister Viktor Orban in Oval Office on May 13, 2019 in Washington, DC. Copyright
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US President Donald Trump has suggested the Federal Reserve could support the United States in its unifying trade dispute with China.

The trade conflict between the world's two largest economies escalated this week with tariff increases on both sides.

In a post on Twitter, Mr Trump said China would move to stimulate the economy to deal with the outcome.

If the Fed were to "match" the potential Chinese stimulus, it would be "game over," he said.

"China will pump money into their system and probably reduce interest rates, as always, to make up for the business they are and will be, to lose," Mr Trump wrote on Twitter.

"If the Federal Reserve ever made a fight, there would be games over, we win! Anyway China wants a deal!"

US presidents have historically avoided commenting on the Fed policy publicly, for fear of to politicize the institution and undermine confidence in its decisions.

Mr Trump has attacked the Fed and its leader Jerome Powell on several occasions over the past year, pushing them to keep interest rates low. 19659005] The US Federal Reserve had "normalized" monetary policy every year by keeping prices at ultra-low levels following the 2008 financial crisis.

At the same time, China has been trying to support its economy as it fights a declining economy and the war.

An agreement "when the time is right"

The United States and China have beaten a trade war since last year, placing billions of dollars on each other's goods. 19659005] Only recently the two countries seemed near a deal, but last week US officials said the Chinese had rejected some of their promises.

The US raised tariffs of $ 200 billion ($ 154.9 billion) on Chinese merchandise on Friday, and China recovered with US barriers this week.

Mr Trump said on Twitter that the United States would make a deal with China "when the time is right".

"My respect and friendship with President Xi is unlimited, but as I have told him many times before, this must be a good deal for the United States, or it just makes no sense," Trump said. 19659005] He added, "It will all happen and much faster than people think!"

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