Global Markets in Chaos as Trump Wields Unchecked Emergency Powers
And nobody seems to be able to stop him - and that, is frightening
“President Trump is invoking his authority under the International Emergency Economic Powers Act of 1977 (IEEPA) to address the national emergency posed by the large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries.”
Full statement from the White House
Donald Trump can apparently invoke national emergency powers without the need for authority or confirmation from the Senate or Congress, granting the president unprecedented powers.
Trump is using the IEEPA to impose sweeping trade tariffs on the entire world whenever anyone seeks to import goods into the United States. He appears to be able to do this entirely on his own, and no one seems able to stop him.
Is the trade deficit a national emergency? We don’t believe so.
The word “dictatorship” comes to mind here — where one person controls their country without reference to, or oversight from, other elected officials.
The world has been thrown into financial chaos. Chaos is often an overused word in the media, but in this case, it accurately describes the state of the world this morning.
World stock markets have continued to react to Trump’s tariffs, wiping out billions — perhaps trillions — in value from share prices globally.
Europe
At the mid-point in Monday trading:
UK FTSE 100: Down 4.17%
Germany DAX: Down 4.8%, after an earlier drop of 10%
France CAC 40: Down 5.1%
Australia
The ASX 200 lost 3.8% — the lowest close since 2023.
Hong Kong
The Hang Seng closed down 13.22% on Monday, the most significant single-day drop since the Asian financial crisis of 1977.
Japan
The Nikkei 225 fell by 7.8% by the close.
Taiwan
Taipei’s TAIEX index plunged 9.7% — the most significant drop ever recorded.
Crypto
By mid-Monday UK time, Bitcoin had lost more than 7% in value, while Ethereum had suffered an 18% drop.
Commodities
It isn’t just stock markets that are falling. Crude oil was down by 3.4% early on Monday, and Brent crude was down by 10.9%.
Reactions
AFP: The worst market crashes since 1929
PA Media: FTSE 100 hits one-year low as market fears deepen after Trump stands by tariffs
Reuters: Analysis – Trump leaves emerging market central banks with no clean choices
Bloomberg: Chinese stocks suffer ‘panic selling’ as tariff war escalates
What does all this mean?
Stock prices are a key indicator of a business’s value and influence its management. Bank loan interest rates can sometimes be tied to share price movement. If a price falls below an agreed-upon level, bank interest rates can rise for the business.
Pension funds invest trillions of pounds, dollars, and other currencies in stock markets around the world. Although most—but not all—funds are actively managed, significant losses will affect the value of many pensions. This will impact both newly initiated pensions and the retirement incomes of many who rely on tracker funds.
Is this Trump’s ‘Liz Truss lettuce moment’?
In 2022, then-UK Prime Minister Liz Truss and her Chancellor, Kwasi Kwarteng, delivered what is widely regarded as the most disastrous budget in UK history. The Daily Star famously live-streamed a picture of Truss next to a lettuce, asking which would last longer. Truss resigned after just 49 days in office—and the lettuce outlasted her.
Donald Trump can’t be removed as swiftly as Liz Truss, but there will surely soon be calls for him to reverse these disastrous tariffs — or to resign.
There seems little chance of either happening. In the meantime, the world will continue to endure financial turmoil, brought about by a single man using emergency powers not authorised by anyone but himself.