President Donald Trump on Friday called for the Federal Reserve’s board of governors to usurp the power of Fed Chair Jerome Powell, criticizing the head of the U.S. central bank for not cutting short-term interest rates.
Posting on his Truth Social platform, Trump called Powell “stubborn.” The Fed chair has been subjected to vicious verbal attacks by the Republican president over several months.
The Fed has the responsibility of stabilizing prices and maximizing employment. Powell has held its benchmark rate for overnight loans constant this year, saying that Fed officials needed to see what impact Trump’s massive tariffs had on inflation.
If Powell doesn’t “substantially” lower rates, Trump said, “THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”
Trump sees the rate cuts as leading to stronger growth and lower debt servicing costs for the federal government and homebuyers. The president argues there is virtually no inflation, even though the Fed’s preferred measure is running at an annual rate of 2.6%, slightly higher than the Fed’s 2% target.
Trump has called for slashing the Fed’s benchmark rate by 3 percentage points, bringing it down dramatically from its current average of 4.33%. The risk is that a rate cut that large could cause more money to come into the economy than can be absorbed, possibly causing inflation to accelerate.
The Supreme Court suggested in a May ruling that Trump could not remove Powell for policy disagreements. This led the White House to investigate whether the Fed chair could be fired for cause because of the cost overruns in its $2.5 billion renovation projects.
Powell’s term as chair ends in May 2026, at which point Trump can put his Senate-confirmed pick in the seat.
President Donald Trump speaks as Federal Reserve Chairman Jerome Powell listens during a visit to the Federal Reserve, Thursday, July 24, 2025, in Washington.
With President Donald Trump’s dramatic tariff hikes on the cusp of starting, countries around the world scrambled on Thursday to finalize their trade frameworks with the United States, figure out the tax rates their goods might face and prepare for the unknown.
Shortly before Friday deadline for the tariffs beginning, Trump said he would enter into a 90-day negotiating period with Mexico, one of the nation’s largest trading partners, with the current 25% tariff rates staying in place, down from the 30% he had threatened earlier.
“We avoided the tariff increase announced for tomorrow and we got 90 days to build a long-term agreement through dialogue,” Mexican leader Claudia Sheinbaum wrote on X after a call with Trump that he referred to as “very successful” in terms of the leaders getting to know each other better.
White House press secretary Karoline Leavitt said at Thursday’s news briefing that Trump “at some point this afternoon or later this evening” would sign an order to impose new rates starting at 12:01 a.m. EDT Friday. Countries that had not received a prior letter from Trump or negotiated a framework would be notified of their likely tariff rates, either by letter or executive order, she said.
The unknowns created a sense of drama that have defined Trump’s rollout of tariffs over several months, with the one consistency being his desire to levy the import taxes that most economists say will ultimately be borne to some degree by U.S. consumers and businesses.
“We have made a few deals today that are excellent deals for the country,” Trump told reporters on Thursday afternoon without detailing the terms of those agreements or nations involved.
Trump said that Canadian Prime Minister Mark Carney had called ahead of 35% tariffs being imposed on many of his nation’s goods, but “we haven’t spoken to Canada today.”
Trump imposed the Friday deadline after his previous “Liberation Day” tariffs in April resulted in a stock market panic. His unusually high tariff rates unveiled in April led to recession fears, prompting Trump to impose a 90-day negotiating period. When he was unable to create enough trade deals with other countries, he extended the timeline and sent out letters to world leaders that simply listed rates, prompting a slew of hasty deals.
Trump reached a deal with South Korea on Wednesday, and earlier with the European Union, Japan, Indonesia and the Philippines. His commerce secretary, Howard Lutnick, said on Fox News Channel’s “Hannity” that there were agreements with Cambodia and Thailand after they had agreed to a ceasefire to their border conflict.
Among those uncertain about their trade status were wealthy Switzerland and Norway.
Norwegian Finance Minister Jens Stoltenberg said it was “completely uncertain” whether a deal would be completed before Trump’s deadline.
But even the public announcement of a deal can offer scant reassurance for an American trading partner.
EU officials are waiting to complete a crucial document outlining how the framework to tax imported autos and other goods from the 27-member state bloc would operate. Trump had announced a deal Sunday while he was in Scotland.
“The U.S. has made these commitments. Now it’s up to the U.S. to implement them. The ball is in their court,” EU Commission spokesperson Olof Gill said. The document would not be legally binding.
Trump said as part of the agreement with Mexico that goods imported into the U.S. would continue to face a 25% tariff that he has ostensibly linked to fentanyl trafficking. He said autos would face a 25% tariff, while copper, aluminum and steel would be taxed at 50% during the negotiating period.
He said Mexico would end its “Non Tariff Trade Barriers,” but he didn’t provide specifics.
Some goods continue to be protected from the tariffs by the 2020 U.S.-Mexico-Canada Agreement, or USMCA, which Trump negotiated during his first term.
But Trump appeared to have soured on that deal, which is up for renegotiation next year. One of his first significant moves as president was to tariff goods from both Mexico and Canada earlier this year.
U.S. Census Bureau figures show that the U.S. ran a $171.5 billion trade imbalance with Mexico last year. That means the U.S. bought more goods from Mexico than it sold to the country.
The imbalance with Mexico has grown in the aftermath of the USMCA as it was only $63.3 billion in 2016, the year before Trump started his first term in office.
Besides addressing fentanyl trafficking, Trump has made it a goal to close the trade gap.
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Associated Press writers Lorne Cook in Brussels and Jamey Keaten in Geneva contributed to this report.
The tariffs planned by President Donald Trump on Friday touched off a feverish bout of activity among trade partners as key details remained unclear and nations didn’t know the taxes their goods could face — keeping an element of surprise to an event long hyped by the U.S. leader.
Just hours before the deadline, Trump on Thursday said he would enter a 90-day negotiating period with Mexico over trade as 25% tariff rates stay in place, providing a bit of clarity to a massive rewiring of the global economy that will require the president to sign a new executive order.
Trump posted on his Truth Social platform that his phone conversation with Mexican leader Claudia Sheinbaum was “very successful in that, more and more, we are getting to know and understand each other.”
The Republican president had threatened tariffs of 30% on goods from Mexico in a July letter, something that Sheinbaum said Mexico gets to stave off for the next three months.
“We avoided the tariff increase announced for tomorrow and we got 90 days to build a long-term agreement through dialogue,” Sheinbaum wrote on X.
The leaders’ morning call came at a moment of pressure and uncertainty for the world economy. As Trump’s deadline loomed, nations were scrambling to finalize the outlines of trade frameworks so he would not simply impose higher tariff rates that could upend economies and governments.
Trump reached a deal with South Korea on Wednesday, and earlier with the European Union, Japan, Indonesia and the Philippines. His commerce secretary, Howard Lutnick, said on Fox News Channel’s “Hannity” that there were agreements with Cambodia and Thailand after they had agreed to a ceasefire to their border conflict.
White House press secretary Karoline Leavitt said Trump “at some point this afternoon or later this evening” will sign an order to impose new rates starting at 12:01 a.m. EDT Friday. Countries that have not received a prior letter from Trump or negotiated a framework will be notified of their likely tariff rates, either by letter or executive order, she said.
Among those uncertain about their trade status were wealthy Switzerland and Norway.
Norwegian Finance Minister Jens Stoltenberg said it was “completely uncertain” whether a deal would be completed before Trump’s deadline.
But even the public announcement of a deal can offer scant reassurance for an American trading partner.
EU officials are waiting to complete a crucial document outlining how the framework to tax imported autos and other goods from the 27-member state bloc would operate. Trump had announced a deal Sunday while he was in Scotland.
“The U.S. has made these commitments. Now it’s up to the U.S. to implement them. The ball is in their court,” EU commission spokesman Olof Gill said. The document would not be legally binding.
Trump said as part of the agreement with Mexico that goods imported into the U.S. would continue to face a 25% tariff that he has ostensibly linked to fentanyl trafficking. He said autos would face a 25% tariff, while copper, aluminum and steel would be taxed at 50% during the negotiating period.
He said Mexico would end its “Non Tariff Trade Barriers,” but he didn’t provide specifics.
Some goods continue to be protected from the tariffs by the 2020 U.S.-Mexico-Canada Agreement, or USMCA, which Trump negotiated during his first term.
But Trump appeared to have soured on that deal, which is up for renegotiation next year. One of his first significant moves as president was to tariff goods from both Mexico and Canada earlier this year.
U.S. Census Bureau figures show that the U.S. ran a $171.5 billion trade imbalance with Mexico last year. That means the U.S. bought more goods from Mexico than it sold to the country.
The imbalance with Mexico has grown in the aftermath of the USMCA as it was only $63.3 billion in 2016, the year before Trump started his first term in office.
Besides addressing fentanyl trafficking, Trump has made it a goal to close the trade gap.
___
Associated Press writers Lorne Cook in Brussels and Jamey Keaten in Geneva contributed to this report.
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