Former Federal Reserve Chairman Paul Volcker said he’s worried about rhetoric coming out of the U.S. White House to the point that he sometimes finds Chinese President Xi Jinping’s statements more sympathetic.
“I sometimes—it sounds terrible—but I respond more favorably to what the president of China is saying than the president of the United States,” Volcker said, speaking with Bridgewater Associates’ Ray Dalio in a video posted to YouTube. “The President of China at least says that he’s looking forward to harmonious relationship over time.”
When it comes to U.S. President Donald Trump, that desire for compromise is less apparent, according to Volcker.
“We’re all threats and demands,” Volcker said.
The Trump administration has been pressuring China to buy more American goods and change its intellectual-property practices. The White House has slapped tariffs on imports from the country, and many of those are slated to more than double on March 1 if U.S. and Chinese negotiators fail to reach a trade agreement first.
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“There’s some justice, of course, in what Trump is doing,” Volcker said. “It is true during our period of leadership we tended to overlook in our own country some of the problems that world leadership implied in terms of willingness to accept a lot of imports, in particular.”
U.S. factories outsourced large portions of their production to China and other nations where labor costs were much lower, and the result was a sharp decline in manufacturing employment. That’s contributed to widening U.S. economic divides between former factory towns and successful big cities, many of them coastal.
“There’s no doubt we’ve had some unevenness and repercussions in the United States,” Volcker said. “How can we develop an economy that’s more balanced between the great middle part of the country and the two coastal areas?”