Trump turns up the heat on Powell as monetary feud deepens

White House economic adviser Kevin Hassett says Trump has the authority to fire Fed Chair Powell if there’s a reason to take that action.

Hassett made the remarks during an interview with ABC’s Jonathan Karl, who asked whether the president could legally remove the head of the US central bank. In response, Hassett affirmed that if there is cause — such as misconduct or dereliction of duty — the president has the authority to dismiss Powell.

His comments follow President Donald Trump’s intensified criticism of Federal Reserve Chairman Jerome Powell, accusing him of undermining the US economy with high interest rates, while simultaneously unveiling sweeping new tariffs targeting Canada, the European Union, Mexico, and Brazil.

Speaking to reporters earlier this week, Trump argued that interest rates should be three points lower, blaming Jerome Powell for costing the country significant money and holding back the US from being the world’s top economic performer.

Despite the sharp criticism, Trump dismissed suggestions that he would fire Powell. However, the administration has escalated its scrutiny of the Federal Reserve, questioning the legitimacy of a $2.5 billion renovation of its headquarters, the most expensive federal project in Washington’s history, and raising speculation that it could be used as a basis to remove the Fed chair. 

Trump unleashes new tariffs on key allies in high-stakes trade gamble

Meanwhile, Trump announced a new wave of tariffs that would take effect on August 1. Despite ongoing negotiations, the latest measures include import duties on goods from Canada, the EU, and Mexico.

According to Hassett, the tariffs are part of a high-stakes strategy to extract more favorable trade terms. “Right now, we’ve got that guy who wrote The Art of the Deal making deals for the American people,” Hassett said. “He sent these letters out to folks to put a line in the sand.”

The administration has defended the move as a negotiating tactic. However, with only a few formal agreements reached so far — including with the UK, Vietnam, and a partial framework with China — the effectiveness of this tariff-driven approach remains under question.

White House defends Brazil and Copper tariffs

The most controversial announcement was a 50% tariff on Brazilian imports, despite the US’s consistent trade surplus with Brazil since 2007. Critics say the tariff appears to be politically motivated, stemming from Trump’s anger over Brazil’s handling of legal proceedings against former President Jair Bolsonaro, a close ally of Trump.

Pressed by ABC’s Jonathan Karl, Hassett defended the move as part of a broader economic security strategy. “This is part of an overall strategy to onshore production in the US,” he said, conceding that Bolsonaro’s treatment played a role.

The administration also slapped a 50% tariff on copper imports, drawing criticism from business leaders and editorial boards. The Wall Street Journal slammed the decision as a blow to American manufacturers, warning it could raise the cost of critical goods such as aircraft, electronics, and ammunition.

Hassett downplayed the risk, citing low inflation data and the need to safeguard domestic copper supply in the event of a national emergency. “Copper is a key component in many American weapon sets,” he said. “We have plenty of copper in the US, but not enough copper production.”

Trump turns up the heat on Powell as monetary feud deepens

On the monetary front, Trump’s public feud with Powell continues to escalate, with the president blaming the Fed for slowing economic momentum. The White House is now scrutinizing the central bank’s massive building renovation, citing cost overruns and questioning whether the Fed, which controls its own budget,  is exceeding its authority.

“The Fed could print money and toss it around willy-nilly… and they’re unbounded right now,” Hassett said, referencing the Fed’s independence from Congressional appropriations.

With interest rate cuts off the table — at least for now — and new tariffs threatening global trade ties, the Trump administration’s dual offensive on monetary and trade policy marks a volatile new chapter in US economic leadership. Whether it leads to stronger deals or deeper fractures remains to be seen.

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