Donald Trump caused an earthquake in the stock markets with the tariffs, now their suspension has caused euphoria. The American president seems to enjoy the power he holds.
The US president is keeping the world in suspense. A few days ago he imposed tariffs on many countries, now Donald Trump's surprising change of course follows and the tariffs imposed are withdrawn. The decision came after major turmoil in stock and financial markets around the world. The US president will now give many countries a 90-day break from customs tariffs. There is only aggravation with China. Trump increased tariffs on goods from China in the meantime to 125 percent.
Stock markets reacted enthusiastically to the lifting of the tariffs, with stocks surging after a steep downward spiral. There were even rumors that investors might sell US government bonds – a worrying development for the future of US public finances. Market observers speculate that this may have led to the decision to suspend the tariffs.
10% tariff in effect
However, a general import tariff of 10 percent will remain in place for most countries. EU Commission President Ursula von der Leyen called Trump's change of course an important step towards stabilizing the economy. "Clear and predictable conditions are essential for the functioning of trade and supply chains." The European Union remains committed to constructive negotiations with the United States, with the aim of ensuring smooth and mutually beneficial trade. But US President Donald Trump's tariff policy, from France's perspective, is damaging confidence in the dollar. The head of the French Central Bank, Francois Villeroy de Galhau, said that "what has happened in recent days and weeks has a negative impact on confidence in the US dollar." Protectionism and unpredictability are also negative factors for the US economy, Villeroy said.
Was Trump put under pressure?
The president himself explained the sudden turn of events by saying that "people" were worried and were "a little scared." However, Trump's own nervousness may also have played a role, as the US government had been stressing for days that the tariffs were not something that could be rolled back or negotiated within days or weeks. US trade expert Laura von Daniels of the German Institute for International and Security Affairs says Trump appears to be under great pressure from financial markets, but also from individual entrepreneurs. Stock prices are something the Republican follows particularly closely and that affects him.
Stock markets reacted sharply after the tariffs were lifted. The stock market, as measured by the S&P 500 index of the 500 largest publicly traded U.S. companies, regained about $4 trillion, or 70 percent of the value it had lost in the previous four trading days. Trump's comment on the move was that "they say it was the greatest day in financial history."
Criticism of Donald Trump's unstable course
But there is also criticism of Trump’s change of course — and accusations of insider trading. Shortly before Trump made his change public, he offered a piece of financial advice on social media: “This is a great time to buy!!! DJT,” he wrote on his Truth Social platform Wednesday morning (local time). Less than four hours later, Trump withdrew some of the tariffs he had previously imposed. DJT — Trump’s initials — is also the ticker symbol of Trump Media and Technology Group, the parent company of the Truth Social social media platform. The company closed up 22.67 percent after the announcement. Trump’s 53 percent stake in the company, now held by a trust controlled by his eldest son, Donald Trump Jr., rose by $415 million that day.
"Who in the administration knew in advance about Trump's recent change of course on tariffs? Did anyone buy or sell stocks and profit at the public's expense?" Other Democrats also sought clarification. "He likes to have control over the markets, but he better be careful," said Trump critic and former White House ethics lawyer Richard Painter, noting that securities law prohibits insider trading./ DW (A2 Televizion)
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