'Cut rates or I'll halt trade': Trump threat to Fed has big implication for India

US President Donald Trump has threatened to halt trade with countries that maintain a trade surplus with the US unless interest rates are cut, creating a significant implication for India. The threat, made after a strong jobs report showed US employers added 162,000 workers in August, reflects Trump's belief that the US should be able to borrow money more cheaply due to its status as the world's largest economy.

However, experts argue that trade deficits and interest rates are not directly linked, and cutting rates does not necessarily eliminate a bilateral trade deficit. If Trump's threat were to be implemented, India would be among the countries potentially affected, with US exporters losing access to the Indian market and US companies finding alternative suppliers for various goods.

The Federal Reserve has shown little inclination to deliver on Trump's demand for rate cuts, as its primary objective is to bring inflation back to its 2% target.

Brief written by urgent.news from Times of India's own syndicated text. Machine-written — may contain errors; check the original before relying on it.