Trump Targets Fed Chair Powell as $2.5 billion Controversy Rages, Unveils Sweeping Tariffs

- White House adviser affirms Trump’s authority to fire Fed Chair Powell “for cause” - New tariffs on Canada, Mexico, EU, and Brazil signal aggressive trade strategy shift On July 13, 2025, White House economic adviser Kevin Hassett confirmed President Donald Trump has the authority to remove Federal Reserve Chair Jerome Powell “for cause,” heightening tensions over the Fed’s interest rate policies. The remarks highlight growing friction between Trump and Powell, as the president consistently criticizes the Fed’s rate decisions, arguing they hinder economic growth. The administration has intensified its scrutiny of the Federal Reserve and is now questioning the $2.5 billion renovation of its headquarters. Hassett suggested that Powell's future could depend on his explanation for the project's cost overruns. Federal law states a Fed chair can only be removed “for cause.” Consequently, legal scholars are divided on whether policy disputes constitute grounds for dismissal. Simultaneously, the Trump administration announced a new series of tariffs on imports from Canada, Mexico, the European Union, and Brazil. On July 13, Al Jazeera reported that these measures aim to strengthen the U.S. negotiating position in trade talks. The tariffs, set to take effect on August 1, include a 30% duty on imports from the EU and Mexico. Meanwhile, a 50% tariff on Brazilian goods has drawn criticism, with some suggesting it may be linked to Brazil's legal proceedings against former President Jair Bolsonaro, a Trump ally. Hassett defended the tariffs as essential for safeguarding American economic interests, despite Brazil's long-standing trade surplus with the U.S., and argued that the measures are part of a broader strategy to address geopolitical concerns and secure the nation's economy. In addition, the administration imposed a 50% tariff on copper imports, citing the need to secure a domestic supply for national security. The tariff has sparked debate, as copper is a critical component in U.S. weapon systems. While industry leaders caution that the tariff could drive up manufacturing costs, Hassett dismissed fears of inflation, stressing the administration's focus on strategic resources. Trump’s trade and monetary policies continue to generate significant debate, marking a transformative period in U.S. economic strategy.