Amid Recession Worries, Trump Points Finger at American Businesses
WASHINGTON — President Trump wants Americans to understand that the economy is doing great, thanks to him. But if in fact the economy sours, then it is someone else’s fault.
Mr. Trump’s Blame List is long. On top, of course, is Jerome H. Powell, the chair of the Federal Reserve — never mind that Mr. Trump was the one who appointed him. Then there are the Democrats, and not to mention the news media.
And on Friday, the president added American businesses to the list, arguing that struggling companies have only themselves to blame and are rationalizing their own mistakes by pointing to, just to name an example, Mr. Trump’s multibillion-dollar tariffs and America’s biggest trade war in generations.
“Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management…and who can really blame them for doing that?” Mr. Trump wrote on Twitter. “Excuses!”
He repeated his point later with reporters. “A lot of badly run companies are trying to blame tariffs,” he said. “In other words, they’re running badly and they’re having a bad quarter or they’re just unlucky in some way. They’re trying to blame the tariffs. It’s not the tariffs. It’s called bad management.”
The president’s search for economic villains comes amid signs of a slowdown, exacerbated by uncertainty from his showdown with China over the future of the relationship between the two largest economies in the world.
Consumer confidence, which increased significantly on Mr. Trump’s watch, fell by 8.6 percent in August, its largest monthly decline since 2012 when the government was on the edge of a so-called fiscal cliff. The University of Michigan, which measures confidence, attributed it to the trade war, reporting that one in three consumers cited Mr. Trump’s tariffs without being prompted.
The concern appears to be bleeding into the presidential race. For the first time since Mr. Trump was elected, more voters responding to a Quinnipiac University poll said the national economy is getting worse than better. Altogether, 37 percent saw the economy heading downward compared with 31 percent who thought it was improving and 30 percent who said it was the same.
To Mr. Trump’s benefit, most voters in the poll still rated the economy good or excellent, but the number of those detecting dark clouds was up by 14 percentage points since June.
The economy is crucial to any president seeking a second term, but few have wrapped themselves in the issue as tightly as Mr. Trump. Polls have shown that the economy has been his strongest asset going into next year’s election.
He has a politically compelling story to tell, with unemployment at nearly a 50-year low at 3.7 percent, average wages now rising and the Dow Jones stock index about 32 percent higher than when he took office. But overall growth has been much slower than he predicted, deficit spending is increasing and various signs point to trouble ahead.
“The historical lesson is whatever happens, the sitting president gets credit or blame,” said Douglas Holtz-Eakin, the president of the American Action Forum, a center-right economic group, and an adviser to Senator John McCain’s 2008 presidential campaign. “That’s always been true regardless of the merits. He is clearly trying to make sure he has some fingers to point.”
The president has increasingly expressed anxiety to advisers that a downturn would harm his re-election chances. He has lashed out repeatedly at Mr. Powell for not lowering interest rates further and faster, even calling him an “enemy,” and he has complained that his opponents and journalists are cheerleading for a recession to take him down.
“We don’t have a Tariff problem (we are reigning in bad and/or unfair players), we have a Fed problem,” President Trump tweeted on Friday. “They don’t have a clue!”CreditDoug Mills/The New York Times
“We don’t have a Tariff problem (we are reigning in bad and/or unfair players), we have a Fed problem,” he wrote on Friday. “They don’t have a clue!”
But his attack on American businesses takes the blame game to a new level, faulting the very sector that he has sought to court with his moves to lower corporate taxes and lift the burden of regulations.
“Blaming businesses for the economic situation is silly since they respond to incentives and uncertainty,” said Jason Furman, who was chairman of the President’s Council of Economic Advisers under Barack Obama. “The job of a policymaker is to help create an environment for businesses to fuel economic growth, not to preemptively blame them for the potential lack of growth.”
Thomas J. Collamore, a former executive vice president of the United States Chamber of Commerce, said he would advise Mr. Trump “to charge his very able trade negotiators” to strike the best deal possible with China, which would allow businesses to expand and stimulate the economy.
“The uncertainty created by additional tariffs or threats of more is causing business to pause and sit on their hands, which could unwittingly lead to an economic version of Hurricane Dorian,” Mr. Collamore said.
The president’s outburst at businesses came a day after Americans for Free Trade, a coalition of industry groups, released a letter signed by more than 160 business associations asking him to postpone further tariff increases.
“Tariffs are taxes that cost American jobs and hurt consumers, creating a problem for the entire U.S. economy,” the group said in response to the president on Friday. “The fact that companies find extra taxes as high as 30 percent challenging is not an excuse, it’s an economic reality.”
A number of large American companies have struggled with life under Mr. Trump’s trade war and in recent days several have reported or projected slowing sales and profits that they attributed to the tariffs.
Deere & Co., which manufactures agricultural equipment, said last week that it was cutting its profit forecast for the second time this year, attributing it to farmers delaying purchases for fear that they will not have as much access to foreign markets.
Best Buy lowered its revenue forecast for the year on Thursday, with its chief executive noting that major products like televisions and smartwatches will be subject to new 15 percent tariffs ordered by Mr. Trump. Clothing retailers like J. Jill and Chico’s have also said they expect lower sales in the third quarter as the next round of tariffs go into effect on Sunday.
“He’s got a substantive problem,” Mr. Holtz-Eakin said of Mr. Trump. “He’s proud of his fulfilling campaign promises — that is a centerpiece of his re-elect and what he’s got with China is higher tariff walls on both sides, damage to both economies and the global economy and nothing to show for it.”
By hammering away at Mr. Powell, his opponents and now American businesses, aides say Mr. Trump wants Americans to know the impediments hindering the economy even as he continues to make the case that the country is still in good shape.
“The economy is doing great,” he said on Friday. “The economy is amazing actually.”
After wild fluctuations in recent days, the markets took his latest comments relatively calmly. The S&P and Nasdaq indexes were essentially flat on Friday, and the Dow Jones closed for the day up by about 1.5 percent.
But as tariffs continue to rise and the election year approaches, Mr. Trump will soon be left to make a calculation about how far he can go in staring down China before it puts his political future in jeopardy, no matter who else he plans to blame. The Chinese know that and they do not have an election to worry about.
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