Archive August 12, 2025

United States President Donald Trump has suggested that Federal Reserve Chief Jerome Powell could face a lawsuit over renovation costs for the central bank’s nearly century-old headquarters.

The threat, issued on Tuesday in a post on Truth Social, is the latest salvo in Trump’s ongoing pressure campaign against the central bank leader.

The two have clashed over interest rates: Trump has pushed for aggressive cuts, while Powell has maintained the bank will make a decision based on financial indicators, not political pressure.

“Jerome ‘Too Late’ Powell must NOW lower the rate,” Trump wrote in Tuesday’s message. “I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings.”

The president’s attacks on Powell have become a source of concern for economic observers, who worry that Trump is attempting to undermine the independence of the central bank and bring it into closer alignment with his political priorities.

Trump has latched onto cost overruns stemming from construction work at the bank’s headquarters in Washington, DC, which he said points to Powell’s “incompetence”.

The Federal Reserve is currently undergoing renovations on two of its historic buildings, both built in the 1930s, including asbestos removal, major structural work to meet modern safety standards, and the replacement of antiquated systems for ventilation, plumbing, electricity and fire detection.

“While periodic work has been done to keep these buildings occupiable, neither building has seen a comprehensive renovation since they were first constructed,” Powell wrote in a letter to the Trump administration on July 17.

“Both buildings were in need of significant structural repairs and other updates to make the buildings safe, healthy, and effective places to work.”

But while the renovation project was initially estimated to cost $1.9bn, that number has increased to around $2.5bn as construction proceeds. Some Republican lawmakers have said they may open an investigation into the increased projected cost, and Trump has used the renovation to push for Powell to step down.

Trump has also pushed strongly for a decrease in rates, dubbing Powell by the nickname “Too Late” for his supposed delays in cutting rates.

Powell’s term as Federal Reserve chair ends in May 2026. Trump, who nominated Powell to the role during his first term, has already suggested he is considering replacing the outgoing chair with a more compliant figure.

“The damage he has done by always being Too Late is incalculable,” Trump said on Tuesday. “Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board.”

Powell and economic policymakers at the Federal Reserve, meanwhile, have expressed concern over Trump’s aggressive tariff policy, which they maintain could increase inflation in the coming months.

Data released by the US Labor Department on Tuesday said that consumer inflation had risen 2.7 percent for the 12-month period ending in July. That number was an increase of 0.2 percent over June.

China has announced preliminary anti-dumping duties on Canadian canola imports, a new escalation in the yearlong trade dispute that began with Ottawa’s imposition of tariffs on Chinese electric vehicle imports last August.

The provisional rate will be set at 75.8 percent, effective from Thursday, the Ministry of Commerce said in a statement on Tuesday.

Intercontinetal Exchange (ICE) November canola futures RSX5, the global benchmark for canola trading, fell 6.5 percent to a four-month low after the announcement.

“This really came as a surprise and a shock,” said trader Tony Tryhuk of RBC Dominion Securities.

China, the world’s largest importer of canola – also known as rapeseed – sources nearly all of its supplies of the product from Canada. The steep duties would likely all but end imports if they are maintained.

“This is huge. Who will pay a 75 percent deposit to bring Canadian canola to China? It is like telling Canada that we don’t need your canola, thank you very much,” said one Singapore-based oilseed trader.

China’s Ministry of Commerce said on Tuesday that an anti-dumping probe launched in September 2024 had found that Canada’s agricultural sector – particularly the canola industry – had benefitted from “substantial” government subsidies and preferential policies.

China has until September, when the investigation formally ends, to make a final decision on the duties, though it has the option of extending that deadline by six months. A final ruling could result in a different rate, or overturn Tuesday’s decision.

The decision marks a shift from the conciliatory tone struck in June when China Premier Li Qiang said there were no deep-seated conflicts of interest between the countries during a phone call with Canadian Prime Minister Mark Carney.

“This move … will put additional pressure on Canada’s government to sort through trade frictions with China,” said Trivium China agriculture analyst Even Rogers Pay.

Canada’s trade, agriculture and the prime minister’s office did not immediately respond to request for comment. The Canadian embassy in Beijing did not respond to Reuters’ request for comment.

China had already imposed tariffs on canola oil and meal in March. Canada is now in a trade conflict with the world’s two largest economies, as it also faces tariffs on some goods from the United States.

Separately, China also launched an anti-dumping investigation into Canadian pea starch and imposed provisional duties on imports of halogenated butyl rubber, according to ministry statements.

‘Extend the losses’

Replacing millions of tonnes of Canadian canola is likely to be difficult at short notice, say analysts.

China primarily uses imported canola to make animal feed for its aquaculture sector. A separate duty on Canadian canola meal imports in March has already put these supplies at risk.

The move provides an opportunity for Australia, which looks set to regain access to the Chinese market with a few test cargoes this year after a years-long freeze in the trade, Pay said.

Australia, the second-largest canola exporter, has been shut out of the Chinese market since 2020 due mainly to Chinese rules to stop the spread of fungal plant disease called “blackleg”.

However, even if Australian imports increase, “fully replacing Canadian canola will be very difficult unless import demand drops sharply,” said Donatas Jankauskas, an analyst with commodity data firm CM Navigator.

Commodity funds have a substantial long position in ICE canola futures, traders said, which should add fuel to the selloff fire.

“This will help accelerate their exit of that long and could really extend the losses,” said Tryhuk.

Another trader said there was already downward pressure coming into canola prices as Canada’s crop is widely believed to be bigger than many previously forecast due to good weather.

“We’re just realising we’ve got a better crop that’s about to come off,” said the trader. “This is a gut punch no one was expecting.”

Ventum Financial broker David Derwin said some traders do not know how to take the Chinese move yet, since it is not a final rule.