US President Donald Trump’s “Liberation Day” comprehensive trade tariffs are a clearly armed plan to make countries more sensitive to the agenda of the administration. What if other economies come out completely from the agreement? Broken supply chains are more commercially open and finally, the arming of capital.
Trump encourages policy aspect as a way to revive the domestic industry and reduce trade imbalances. He believes that the way to do this is to put heavy tariffs to everyone (except Russia). Does the world really need the US at the business desk? Maybe some countries, but not assumed to be Trump’s “number one enemy”.
International investors are now re -thinking that they are exposed to the US economy. Due to the current market blood bath, they are preparing for a world where capital is a geopolitical pressure tool, not only goods.
US market capital flows may be at risk
For the last six months, according to more than one investor survey stated According to the Financial Times, the fund (ETF) flows designed for the stock market are moving towards non -US markets. Foreign stakeholders do not smile about the increasing unpredictability of US trade and economic policy, and leave Wall Street to deal with Brunt.
In the questionnaires, economists estimated that a US trade deficit that shrinks thanks to Donald Trump’s fierce tariffs would inevitably lead to cross -border capital flows.
According to the operating rule, the current account deficit of a country reflects capital flows inward, so narrowing the trade gap can accidentally restrict foreign capital that has supported the US financial system for decades.
Currently, non -bank financial institutions, which control about 70% of the US private sector financial assets, can get the bitter end of the agreement. These organizations are growing international capital by directing the American and directing to private investments. If the flow slowly slows down or reversed, the US markets would have to say goodbye to their operations, and even the survivors would have to bore funds for the sectors they supported.
Will investors escape the US markets?
When President Trump recovered his ticket to Washington’s safest office in November, Green shone after the market market was opened. Foreign and local investors had an idea: the Trumpian market would enrich them. And so they flocked to the US markets, hoping to capture the rising train before the final decline arrived. However, no one expected the fall to come soon.
What remains now is the threat of capital return, withdrawing foreign funds from the US markets. Since 2015, the share of international investors from US government debt has fallen from 33% to 24%, which is a decline that will fall even more if global partners see the US as an unreliable trade collector.
According to FT, the foreign ownership of US stocks has increased steadily in the last twenty years and now accounts for approximately 18% of the total US market value.
Any harmonious move for international investors to retreat to protest or finance increasing domestic defense budgets will certainly lead to a mass sale and the American home fortune will fall with this.
It is reported that the US has rapidly monitoring the establishment of a dominant reserve fund and combining it with large -scale privatizations and sales of federal lands, now weakened by the Government Productivity Department (DOGE) provided by Elon Musk.
Some analysts claim that Washington can help Norway to create a domestic capital buffer that will overcome the global of the $ 1.8 trillion government pension fund. But these are just IFS, Buts and Maybes; Nobody knows if President Trump will wake up tomorrow and change his mind tomorrow.
Trump knows that Europe and England are vulnerable
The consequences of a withdrawal in global capital flows will not be limited to the US, because Europe is also struggling with slow growth, permanent inflation risks and increasing financial demands.
Finance experts criticized the EU’s fragmented capital markets for lack of scale and integration required to support large -scale investment in critical sectors such as defense, infrastructure and energy.
Annual inflation in the Euro zone has been slightly below the expectations of 2.3% in March 2025 to 2.2% and the lowest level and preliminary estate since November 2024. released Friday.
Service inflation fell from 3.7% to 3.4%, the lowest level of 33 months in February. Energy prices also fell and fell by 0.7% after a slight increase of 0.2% in the previous month.
Inflation remained constant at a rate of 0.6%for non -energy industrial goods and unchanged at 2.6%for processed food, alcohol and tobacco. However, unprocessed food prices increased by 4.1% in February compared to 3.0% and saw a sharp increase.
Excluding variable components such as energy and food, the core inflation fell to 2.4%below 2.5%of analysts. Consumer prices increased by 0.4% in February by 0.6% in March.
Statistics will find that inflation pressures have fallen, but without a decisive and completely unified capital markets union, the block will find itself in an existential crisis, which is what Trump wants. We have to wait and see if the EU will negotiate with the US President.
Isn’t Trump ready to negotiate?
According to the United States President Peter Navarro Trade Consultant, new tariffs are not “a negotiation”. However, Trump was talking at Air Force One on Thursday, said If reporters, other countries offer “extraordinary” offers, it was open to controversy.
Does the president use tariffs to reduce businesses that do not fit because they will come and talk to him? Some Netizen believe it.
“Basically, Trump sits back and waits for industrial captains to come to Grovel on his feet, and then waive the tariff when they pay for him. The greatest grunter in the history of the world, the nation” in question A user on social media X.
Minnesota Governor Tim Walz described the President’s trade ideas as outdated and ineffective.
“You should almost be an amateur psychologist. Trump seems to be stuck in the 80s. In these tariffs forever, every economist, conservative or liberal will tell you that they do not only work…CN CNBC said in an recent interview.
There is a room for negotiations – always there. But Donald Trump Codeword wants before anyone entering: What are you going to do for America?
