Donald Trump is triggering economic chaos and doesn’t seem to care (Image: Getty)
Trump was always going to be outrageous, volatile and extreme, but investors assumed he would somehow be good for the US economy.
They dismissed his trade tariff threats as mere bluster. They told themselves he’d do everything in his power to keep stock markets flying, because that’s how he measures his own success as US President.
The reality is proving very different.
Trump’s constant threats to slap 25% tariffs on key trading partners China, Mexico, Canada and the EU are scaring the life out of investors.
US businesses are scaling back spending, wary of the economic uncertainty he is creating. With Trump likely to drive inflation higher, shoppers are holding back too.
Government workers aren’t spending either. They don’t know if they’ll have a job tomorrow as fires them in droves.
Trump is enjoying himself. He revels in chaos and attention.
Businesses, workers, consumers and stock markets do not.
After years of smashing the world, the US S&P 500 Index has slipped 4% in the last month. The tech-heavy Nasdaq is down 6%.
Shares in electric car powerhouse stock Tesla, run by Trump sidekick , have crashed 25%. .
Now a little-known warning indicator is flashing red. Things could get really nasty from here.
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Federal Reserve Bank of Atlanta’s GDPNow measure is sending a terrifying warning – as if we needed one.
Just one month ago, it suggested the US would continue to boom, its economy rising a healthy 4% in the first three months of 2025.
It slashed this forecast to 2.3% a couple of weeks ago, amid signs the US was slowing.
Last Friday, it turned negative.
GDPNow predicted the US economy would SHRINK by 1.5% in the first quarter. And on Monday, it upped the drop to 2.8%.
This isn’t a drop in the stock market. Then I wouldn’t be so worried. Shares go up and down all the time.
It’s a drop in the size of the US economy. The world’s biggest.
That’s a massive plunge for a three-month period. The biggest since struck five years ago plunging the world into lockdown.
Trump is shunting America into a quickfire recession, and the rest of us may swiftly follow.
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Trade wars are among the most damaging policies a government can inflict on itself – and their trading partners.
In the 1930s, the Smoot-Hawley Tariff Act triggered the Great Depression, which only ended when the Second World War began.
Trump claims his tariffs will inflict short-term pain but deliver long-term gains. Most experts disagree. Strongly.
Last time Trump imposed tariffs in 2018, they cost American businesses and consumers billions.
Now he’s doing it again, on a far grander scale.
And he doesn’t care who gets hurt.
Britain relies on global trade. US tariffs would hurt us even if we escape them directly.
This is yet more disastrous news for Labour chancellor Rachel Reeves. She inherited a rotten economy from the but her bungling has made things even worse.
Now Trump could finish the job. The world is on red alert.