The Fed can't fix trade, Mr Trump

US President Donald Trump seems to believe that the United States Federal Reserve has a magic wand that can make all problems go away. PHOTO: REUTERS
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More tariffs mean more and bigger interest rate cuts by the United States Federal Reserve. More rate cuts means the US economy gets stronger and the stock market goes higher.

That would appear to be what US President Donald Trump is betting on as the US election year draws nearer. But this script is unlikely to play out. More likely, it would work in reverse: Mr Trump's actions would make the US economy worse, and the global economy along with it.

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