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Trump: US 'Very Far from a Recession'

President Donald Trump pauses while speaking during a meeting with Romanian President Klaus Iohannis in the Oval Office of the White House, Aug. 20, 2019, in Washington.
President Donald Trump pauses while speaking during a meeting with Romanian President Klaus Iohannis in the Oval Office of the White House, Aug. 20, 2019, in Washington.

President Donald Trump said Tuesday the U.S. is "very far from a recession," even as forecasters point to warning signs that the world's biggest economy is slowing.

The U.S. leader said that the American economy "is doing fantastically."

But as in recent days, Trump contended that the country's economy would not advance as much as it might unless the independent Federal Reserve Board cuts its benchmark interest rate over time by a full percentage point, on top of last month's quarter-point cut to 2.25 percent.

"We really need a Fed rate cut. I've been quite vocal on that," Trump said as sat alongside Romanian President Klaus Iohannis ahead of their private White House talks.

Trump said he is considering tax law changes to put more money in the hands of Americans, perhaps cutting the payroll taxes that all U.S. workers pay to fund pensions for older workers and retirees and the manner in which investors' capital gains are taxed.

The U.S. economy grew by an annual rate of 2.1 percent in the April-to-June period, higher than in some countries around the world, although down a percentage point from the first three months of the year. Some independent economists in the U.S., although not Trump's White House economic advisers, are predicting a U.S. recession next year or in 2021. A recession is defined as two consecutive three-month periods of a shrinking economy.

Trump, speaking of the U.S. economy, said, "The word recession is very inappropriate."

But he allowed that Federal Reserve interest rate decisions are "psychologically important."

"We're set for a tremendous burst of growth if the Fed does its job," Trump said, adding, "That's a big if."

U.S. stock markets and farmers have been roiled by Trump's trade conflict with China, with the two biggest global economies unable, so far, to reach a new agreement. Talks are set to resume again in September.

Depending on the day in recent weeks, U.S. stock indexes have sustained huge losses with investor uncertainty about the trade negotiations, but often then rebounded over succeeding days. The U.S. government has sent billions of dollars in aid to American farmers to cover their losses when China stopped buying their crops in retaliation for the tariffs Trump has imposed on Chinese exports sent to the U.S.

Now, with a new 10% levy Trump says he plans to impose on Sept. 1 on about $100 billion more of Chinese imports, the giant JPMorgan Chase bank says American consumers will be forced to pay about $1,000 more annually on the Chinese-made products they buy, an amount big enough to erase any benefit some middle-class workers gained from income tax cuts Trump won congressional approval for earlier in his presidency.

Trump delayed the same 10% levy on another $200 billion worth of Chinese imports -- consumer electronic products, clothing and footwear -- until Dec. 15 so as not impact the holiday shopping season in the U.S.

Trump defended his handling of the trade dispute with China, saying it has led to China's "worst year (economically) in 27 years." Trump said, "I'm not ready to make a deal" with China, unless Beijing agrees to more favorable terms on intellectual property and other disputes.

"Somebody had to take China on," Trump declared. "China has been ripping this country off for 25 years."

Trump said as he blamed former U.S. Presidents Bill Clinton, George W. Bush and Barack Obama for failing to confront China's trade policies.

"They all should have done it," Trump said. "I'm doing it."

Trump dismissed concerns about the possibility of hardship for American consumers caused by the tariffs he is imposing on Chinese imports they buy.

"Whether it's bad or good for the short term is irrelevant," Trump said. "I like doing this because someone had to."