It has been suggested that Donald Trump is ‘having his Liz Truss moment’ as global stock markets continue to tumble in the wake of his widespread tariffs.
Last week, the US president announced worldwide tariffs on goods entering America, including a 10% universal tariff on all goods and higher rates for the likes of China and the EU, who Trump labelled ‘the worst offenders.’
The tariffs sparked an immediate drop in stock markets across the globe, a trend which has continued into this week.
On Monday morning, the FTSE 100 in London was down almost 6% and the Dax index in Germany’s was down almost 10%.
Things were worse in Asia, where Hong Kong’s Hang Seng index closed down 13.22%, the worst one-day slump since the 1997 Asian financial crisis.
Markets are expected to fall on Wall Street as well when their markets open later on Monday.
The continuing plummeting of the markets has led some to suggest that Trump may be having his ‘Liz Truss moment’, in reference to the former Tory leader’s disastrous mini-budget, which ultimately led to her becoming the shortest-serving prime minister in British history.
The BBC’s business editor Simon Jack said people were describing the stock crash as a “bloodbath”, with major international banks such as HSBC and Standard Chartered suffering some huge losses overnight.
He reports: “Meanwhile, key commodities like copper and oil are also flashing red on fears for a global economic slowdown.
“More than one market commentator tells me that Donald Trump is having his Liz Truss moment – when markets lose confidence in the direction and competence of economic policy makers.
“When that applies to the world’s biggest economy and biggest customer on the planet, the fear is universal.”
Meanwhile, one expert has said the ‘worst is yet to come’, describing Trump’s tariffs as “little short of economic suicide.”
In Monday’s market analysis, Michael Brown, senior research strategist at Pepperstone, said: “The US economy is barrelling rapidly towards recession, and will probably end up taking most of the rest of the world with it. Concurrently, inflation is going to ramp substantially higher for the next couple of quarters, at the very least. Here we are then – stagflation.
“Tariffs are, of course, the root cause of all this. ‘Liberation Day’ will probably go down as one of the biggest, and most obvious, policy mistakes of the last few decades. Not only were the ‘reciprocal’ tariffs calculated in a way that defies all logic, as well as being at the hawkish end of market expectations, they are nothing but bad news, creating higher prices for the US consumer, and higher costs for US businesses.
“The only thing that’s been liberated is the United States from an economy that was, until Wednesday, the envy of the world. Worst of all, this whole saga is completely unnecessary, and little short of economic suicide.”
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