Trump Moves From Trade War to Currency War

President Donald Trump has already given the global economy trade wars. Now there are signs he may be gearing up for a currency war, too.

With a series of tweets on Tuesday aimed at the European Central Bank and an announcement by Mario Draghi, its president, that he was prepared to cut interest rates further below zero in response to Europe’s slowing growth, Trump made a rare American presidential intervention into another economy’s monetary policy.

“Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others,’’ he tweeted. Later, he added: “German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!’’

It was not the first time Trump has blamed currency manipulation overseas for a strong dollar that raises the cost of U.S. exports. He has already become unique among recent American presidents in a shift away from the “strong dollar’’ policy of his predecessors.

Finance ministers and central bankers this month agreed that a currency war — a tit-for-tat push at times of slow economic growth to actively weaken foreign-exchange rates in order to boost exports — is in no one’s interest. They reaffirmed commitments made in March 2018 to refrain from competitive devaluations.

A drop below 1.10 for the euro-dollar rate could inflame Trump’s temper and make him more likely to impose those auto tariffs, according to Jens Nordvig, the founder of Exante Data LLC. The rate fell as low as 1.1181 on Tuesday after Draghi said additional stimulus may be needed and Trump levied his latest Twitter missive.