Published: Wed, August 21, 2019
Global News | By Blake Casey

US "Very Far" From Recession, Says Donald Trump

US

US President Donald Trump says his administration is looking to cut US taxes but he isn't talking about doing anything at this moment.

Speaking during the visit of the Romanian President Klaus Iohannis to the White House Tuesday, Trump was asked about concerns that his trade war with China is negatively impacting the U.S. economy.

"We're very far from a recession", he said.

Analysts have warned for months that the USA economy is poised for a sharp slowdown with tougher headwinds on the horizon, such as the waning effect of the tax cuts, the rise of policy uncertainties, disruption of global supply chains, slower productivity growth, and a ballooning public debt.

President Donald Trump acknowledged his aggressive China trade policies may mean economic pain for Americans but insisted they're needed for more important long-term benefits.

Politico reported late Tuesday that Trump officials are considering "a cut of an additional percentage point or two to the corporate tax rate", which the GOP tax law slashed from 35 percent to 21 percent in 2018. The inverted yield curve has preceeded every major economic downturn over the past 50 years.

But an alarm bell went off in the U.S. Treasury bond market last week when 10-year bond yields briefly fell below the yields offered on a two year-bond-the inverse of what normally happens.

Mr Trump also spoke about continuing trade tensions with China, hinting that a deal with Beijing could still be some way off.

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"Fears that the trade war will trigger a recession are growing", Goldman Sachs chief economist Jan Hatzius said in a note.

Trump said he would not need the approval of congress to link the tax on profits from asset sales, known as capital gains, to inflation.

Also under consideration is reversing new tariffs the Trump administration imposed on Chinese goods, according to The New York Times.

President Trump and aides are reportedly concerned that a recession could seriously dent his chances of re-election in 2020.

"And it's about time, whether it's good for our country, or bad for our country short term", he continued.

The president's seeming acceptance that his policies could cause the U.S. economic pain marks a sharp departure from his remarks in recent days, in which he has boasted of the strength of the United States economy and accused the media and political opponents of skewing economic data to precipitate a recession and help torpedo his chances of relection in 2020.

About 38 percent of economists predict that the next recession will begin in 2020, while other 34 percent believe it will occur in 2021, according to a survey released by the National Association for Business Economics on Monday.

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