Entering text into the input field will update the search result below

Cutting Through The Noise: Trump, Trade, And Twitter

Franklin Templeton profile picture
Franklin Templeton

By Matthias Hoppe, Senior Vice President, Portfolio Manager

In 2018, President Trump's tweets on international trade have led to bouts of market volatility and concerns of a global economic slowdown. Against this backdrop, Franklin Templeton Multi-Asset Solutions' Matthias Hoppe explains why he thinks economic fundamentals will determine the fate of the global economy more than Trump's words will.


In recent months, President Donald Trump has imposed import tariffs on long-standing US allies, including Canada, Mexico, and the European Union (EU). He's also enacted tariffs on a growing list of products from China.

As the chart below shows, the two US neighbors - and the EU - have been the largest US trading partners over the past 10 years.

Trump Tweets and the Stock Market Trembles

The communication channel for Trump's thinking on trade issues always seems to be the same: Twitter. The impact of his recurring threats to raise even more customs duties on even more goods from abroad are felt not just on stock markets but across the full gamut of financial markets.

As soon as Trump tweets about punitive tariffs, US stock indexes often fall or rise, bond yields typically move, sometimes the US dollar depreciates or gains in value in one day. No wonder investors seem disorientated.

Despite the volume of headlines, Trump's Twitter pronouncements haven't done too much damage to global stock market performance overall this year - at least not yet. On the other hand, some emerging-market asset classes, particularly currencies, have been volatile as the world's second-largest economy - China - has responded with tit-for-tat tariffs.

As the chart below shows, emerging-market currencies, as measured by the JP Morgan Emerging Markets Currency Index1, fell about 7% in the first half of 2018.

Why Trump Tweets Are Likely to Continue

In our view, the political

This article was written by

Franklin Templeton profile picture
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.4 trillion in assets under management as of June 30, 2023. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.

Recommended For You

Comments (1)

Rudester profile picture
I am beginning to wonder if anyone in the White House or presidential family member/close friends, are front running the presidential tweets.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.