Robert Peston has blasted Donald Trump for creating a “Truss-style fiscal crisis” as his global tariff policy comes into effect.
This week has seen stock markets across the world plunge in reaction to Trump’s wide-ranging tariffs on imports to the US.
Monday saw huge losses in European, Asian and American markets with trillions wiped off the stock market. Despite small signs of recovery on Tuesday morning, the markets suffered further losses on Wednesday as the tariffs came into effect.
This included London’s FTSE 100 index opening 2.5% down and significant losses in Asian markets.
Among the tariffs that have come into effect on Wednesday are a 104% rate on China, a 20% rate on EU goods and a 25% rate on vehicles.
Over the last couple of days, investors have started selling long term US government bonds, something which Robert Peston said was “startling” and “scary.”
Comparing the situation to the immediate aftermath of Liz Truss’s disastrous mini budget, the ITV political editor said Trump’s “tariff-induced crash” is turning into a “Truss-style fiscal crisis.”
He continued: “The collapse in US government long bonds, Treasuries, is startling, scary. It is precisely the opposite of what Trump and his advisers expected and wanted.
“It partly reflects heightened fears of US recession – which would see ballooning of US deficit – and may also be revenge selling by sovereign holders in tariff-hit countries. This bond market turmoil also increases risk of margin calls and forced sales by over exposed institutional investors. Another huge day.”
At the start of the week, some had made a similar comparison between Trump’s tariffs policy and Truss’s infamous mini-budget.
One market commentator told the BBC on Monday that Trump was “having his Liz Truss moment – when markets lose confidence in the direction and competence of economic policy makers.”
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