By Cong Ge Source:Global Times
US President Donald Trump attends a press conference in the White House in Washington D.C., the US, on Feb 26, 2020. Photo: Xinhua.
US stock markets did not respond positively to US President Donald Trump’s televised national address Wednesday night aimed at reassuring the US public and calming financial markets amid the coronavirus (COVID-19) epidemic. On Thursday morning, global investors staged a bloodbath on Wall Street, as they continued to offload stocks, forcing the market to halt trading so it could cool off.
Shortly after the opening bell, the S&P 500 plummeted 7 percent, triggering a circuit breaker that suspended trading for 15 minutes. For the second time this week, trading halted due to sharp and sudden declines. US stocks are now in bear market territory.
For those who witnessed the outburst of anger and frustration around the globe stirred up by Trump’s speech, the continued free-fall of major US stocks was predictable. During his 11-minute speech, Trump downplayed the risks while pointing his finger at other countries for the “foreign virus” and failed to offer a coherent strategy to address the outbreak and its economic impact.
Trump announced a ban on travel from more than 20 European countries, which was a complete disaster. European countries were infuriated over the move that has since caused chaos at airports throughout the continent. Restricting travel is not only ineffective in stopping the virus, but also inflict more pain on the US economy like rubbing salt on a wound.
Also, during his speech, Trump offered economic relief measures, including $50 billion in loans to businesses. Unfortunately, that’s too little and too late.
Trump’s most ironic statement was when he declared, “this is not a financial crisis.” But as Wall Street has shown, that could have been the easiest lie to catch.
The bottom line is that Trump’s hands are tied as he responds to the COVID-19 outbreak. The US president is afraid to implement necessary measures because of the upcoming election when everything is supposed to be smooth for the incumbent.
But this does not mean Trump is unable to do anything. For starters, Trump should stop blaming others and restricting normal travel, and instead face the issue head-on. If he wanted to help US businesses and boost the stock market, he should suspend the trade wars.
Trump can blame others all he wants, but at the end of the day, no one will pay for the losses more than the US. The real danger is how the US public and the global economy could suffer.
The author is a reporter with the Global Times. [email protected]