Former US President Donald Trump has issued one of his strongest economic warnings yet, saying the United States could “stop trading” with countries that run large trade surpluses against Washington unless the Federal Reserve lowers interest rates. His remarks came shortly after a strong August jobs report, which he argued should push the Fed toward easing rather than tightening.
Trump claimed that high interest rates put the US at a “very unfair disadvantage,” insisting he would not allow that situation to continue. He repeated his long‑standing demand that America should have the “lowest rate of any country in the world,” adding that if the Fed refuses to cut rates, he would consider halting trade with surplus nations.
The comments landed amid fresh economic data showing the US trade deficit remains substantial. Last year, China accounted for more than $200 billion of the US trade gap, followed by Mexico and Vietnam. Overall, the US recorded a $1.2 trillion trade deficit across all partners, according to federal data cited by CNN.
More recent figures show the deficit widening further. In July, the US goods and services gap hit $88.6 billion, its highest level since March 2025 and a sharp 24.4% increase from June’s $71.2 billion. Country‑wise, Mexico led with a $27.5 billion deficit, followed by Vietnam ($23.3 billion), China ($15.2 billion), and the European Union ($8.9 billion).
Trump has repeatedly dismissed discussions about raising borrowing costs as “ridiculous,” arguing that higher rates weaken American competitiveness. His latest threat underscores the growing tension between monetary policy and trade policy, with global markets watching closely for any shift in the Fed’s stance.