Today, US President Donald Trump spoke to the media from the World Economic Forum in Davos once more, this time using the chance to blast the Federal Reserve, of whom he has been critical almost since the beginning of his presidency.
He reiterated his opinion that the interest rate increases employed by the Fed were bad for the economy, limiting growth, and that the subsequent easing of interest wasn’t fast or aggressive enough. Note that a huge reason for the Federal Reserve to turn dovish on interest was to soften the blow of Trump’s rather unpredictable trade war with China.
Moreover, Donald Trump also used the occasion to announce a new change to the tax system in the United States, promising a tax cut for middle-class Americans, reportedly to be unveiled in the next three months. This would be the most significant tax policy he’s done since the reshuffling of tax brackets in 2017.
In addition, Trump also reminded everyone that he still has his eyes on trade with the European Union. Now that a deal with China has been secured, many suspect Trump will turn more aggressive towards the EU. Today he said that unless the US and the EU get a deal soon, he will impose a 25% tariff on European cars, which will certainly hit the eurozone hard.
The United Kingdom, which will soon no longer be a part of the European Union, might also be in trouble regarding trade with the US. The United States is unhappy with a proposal tax on digital services in the UK, which would affect US tech companies. US Treasury Secretary said the United States will impose taxes on UK cars in retaliation if the law goes through.
