As the Stock Market Tanks, Trump Blames China

Donald Trump takes the stage for the campaign town hall meeting in Derry, New Hampshire, August 19. Brian Snyder/Reuters

With global financial markets in turmoil, Donald Trump, the Republican presidential front-runner, weighed in on the dramatic sell-off, saying China is a threat to the United States.

"I've been telling everyone for a long time China is taking our jobs. They're taking our money. Be careful. They'll bring us down. You have to know what you're doing. We have nobody who has a clue," Trump said in an Instagram recording Monday afternoon.

Earlier, Trump had tweeted:

Markets are crashing - all caused by poor planning and allowing China and Asia to dictate the agenda. This could get very messy! Vote Trump.

— Donald J. Trump (@realDonaldTrump) August 24, 2015

If the market turmoil continues, it threatens to stop an extraordinary run up in stock prices since the financial crisis. Since the Dow Jones Industrial Average closed below 7,000 in the spring of 2009, it has risen to north of 18,000. The recent sell-off has been fueled by concerns about slowing growth in China, a country that has helped drive the global recovery over the last six years.

A China-led crisis is in some ways a perfect issue for Trump, who has made Beijing's economy a central focus of his campaign. While he has generally portrayed China as a booming behemoth, led by shrewd trade negotiators adept at stealing American jobs, the market losses have allowed him to pivot to a slightly different point: The U.S. is too closely intertwined with China, and a downturn there will inevitably lead to one here.

Whether Trump's remedies of high tariffs and abandoning the bipartisan global trade deals of the past quarter century would help or exacerbate the problem is a question Republican voters will have to decide. But the market's recent woes have put the issue at the center of the campaign.

Trump has said less about other trade and finance matters, although over the weekend he took a swipe at hedge funds. "The hedge fund guys didn't build this nation. These are guys who shift paper around, and they get lucky," Trump told CBS's Face the Nation on Sunday. "They're paying nothing, and it's ridiculous."

Hedge fund managers and other financial executives can pay taxes at the lower rate afforded to capital gains. That has led many critics to call for the so-called Buffett Rule, named after investor Warren Buffett, who said a household making over $1 million annually should never pay a lower tax rate than a middle-class household.

Trump didn't call for higher taxes on such financiers, although his remarks seemed to imply that he is open to the idea. The developer has promised to issue a tax plan this fall.

When it comes to monetary policy, Trump has said low interest rates have greatly benefitted his real estate business. Yet he worries about an asset bubble being formed by the Federal Reserve's near-zero interest rates, among other policies.

Trump has also said he'd like to appoint a Federal Reserve chairman like Paul Volcker, who led the powerful central bank from 1979 to 1987. Volcker is credited with helping end the 1970s stagflation—a rare combination of high inflation and high interest rates—through dramatic rate hikes that brought the country into a deep recession but, many believe, paved the way for strong growth in the second half of the 1980s.