President Trump repeatedly responded to Friday’s blowout jobs number by threatening that, in the wake of a new spike in the US trade deficit, he could impose embargoes on unfavored countries.
Trump posted on Truth Social, in what appeared to be a directive to the Federal Reserve, to “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT.”
Trump, who has long voiced a desire for lower interest rates, asserted that an embargo could be “BETTER THAN TARIFFS” and wrote, “the Fed Board, with its great new leader, must get smart.”
Pressure on the central bank from the president isn’t new, but threats of a trade embargo are. Embargoes would be a new level of disruption for the global economy, and the president likely has the legal authority to follow through.
Later in the day, speaking to reporters in the Oval Office, Trump reiterated his focus on potential embargoes, saying he was under “no obligation” to allow trade and repeatedly floated the idea of banning all trade with Canada.
He also criticized the US trade deficit with Mexico and the European Union, claiming that cutting off trade would help the US economy and that he could implement an embargo with “one swipe of the pen.”
President Donald Trump is seen in the Oval Office of the White House on Friday. (Kent NISHIMURA / AFP via Getty Images) · KENT NISHIMURA via Getty Images
As Trump noted, the International Emergency Economic Powers Act of 1977 gives the president the power to impose an embargo in what is deemed an economic emergency. But, as the Supreme Court ruled in February, it doesn’t give the president the power to levy tariffs.
The latest trade data painted an unwelcome picture for the president, who has long made zeroing out trade deficits a central promise.
The US trade deficit in goods and services ballooned in July with a new gap of $88.6 billion, the highest level since March 2025. That was a 24.4% surge from June’s $71.2 billion.
The data also included a country-by-country breakdown and showed continued US trade deficits with many major trading partners, including Mexico (a $27.5 billion deficit in July), Vietnam ($23.3 billion), China ($15.2 billion), the European Union ($8.9 billion), and many others.
The growing trade deficit was at least partly fueled by AI data center build-out spending, which the president has often touted.
On Friday afternoon, he said that if he were running a state, “I would want as many data centers as we can.”
Imports of computers surged by 25% between June and July and semiconductor imports jumped 10% as tech companies continued to spend heavily on the facilities.
AI spending also appeared to be fueling Friday’s jobs figures in part, with construction jobs (many of which are for those data centers) up by 22,000 jobs in August.
This story has been updated.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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