Trump tells Fed to slash rates or he'll end trade with countries with U.S. surpluses

Trump threatens to halt trade with top partners unless Fed cuts rates Skip Navigation Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu Key Points President Donald Trump demanded that the Federal Reserve slash interest rates or else he will cut off trade with countries with which the U.S. maintains trade deficits. He doubled down in the Oval Office later Friday, saying, "we should be paying the lowest interest rate in the world." Trump has urged the central bank and its chairman, Kevin Warsh, to "get smart" and cut rates. The U.S. has large deficits with dozens of countries, including its top trading partners. watch now VIDEO 1:03 01:03 Trump tells Fed to slash rates or he’ll end trade with countries with U.S. surpluses Squawk on the Street President Donald Trump on Friday doubled down on his threat to cut off trade with countries that have surpluses with the U.S. unless the Federal Reserve cuts interest rates . "What I'm saying, very simply, is that we should be paying the lowest interest rate in the world," Trump said in the Oval Office. He had been asked about his Truth Social post earlier in the day declaring, "LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT." Trump issued that sweeping ultimatum after urging the Fed and its chairman, Kevin Warsh , to "get smart" and cut rates following a much-stronger-than-expected monthly jobs report . Read Trump's full post: Great jobs number just announced, breaking all estimates (except mine!) by double and triple - And you haven't seen anything yet! EMPLOYERS ADDED 162,000 JOB IN AUGUST. Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago! A STRONG COUNTRY MEANS A LOWER INTEREST RATE - IT'S A BETTER CREDIT…Very simple! We should have the LOWEST RATE of any country in the World, like "the old days." Without the United States agreeing to allow them their big surpluses, and we could stop that immediately, they would no longer be considered financially ELITE! LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged "the President" has an absolute right to do. IT'S BETTER THAN TARIFFS! The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won't allow that to happen! President DONALD J. TRUMP The Fed declined to comment on Trump's post. The White House did not respond to CNBC's request for additional information. Taken at face value, the threat to end trade with deficit-harboring countries is extreme: The U.S. has large deficits with dozens of countries , including its top trading partners. Trump has long sought lower interest rates and frequently complains about U.S. deficits with other countries. But many economists say trade deficits themselves are not necessarily good or bad. In fact, deficits can occur when a country has more purchasing power to buy more goods. What's more, the countries that have trade surpluses with the U.S. will often use the dollars they receive to buy U.S. Treasurys , putting that money back into domestic circulation. The U.S. has reported trade deficits in the tens of billions of dollars each month for decades . But in the Oval Office on Friday afternoon, Trump once again portrayed deficits as a zero-sum game in which other countries are taking advantage of the U.S. "We have a big deficit with a lot of countries that should never have been allowed to happen," Trump said. Read more CNBC politics and policy coverage Trump-touted Freedom Fuel expands to Detroit amid suit over supplier's unpaid fuel Vance says Fed should lower interest rates: 'Would be nice to have some help' Canada PM Carney swipes at Trump Commerce Sec. Lutnick over trade, tariff row "We have the right to take a so-called financially elite country that's paying a much lower interest rate ... Some countries are paying a half a point, and we're paying four points, and yet we're a much stronger credit than they are," he said. "If we're not going to be treated properly, we're going to do that," Trump said. "And all we have to do to cut our trade deficit with the country is not trade with them." He named Canada — which is currently locked in a trade and tariff feud with the U.S. — as an example. "If we were playing hardball, all we'd do is say we're going to do no trading with Canada. If we did no trading with Canada, we'd save 90 billion dollars," Trump claimed. "And so what I'm saying, very simply, is that we should be paying the lowest interest rate in the world," he said. "Each point in interest in this country that we pay costs us $650 billion. We should be at 1 percent or a half a percent. We shouldn'