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Fuelled by expectations of a Wall Street-friendly policy platform, a “Trump bump” pushed the S&P 500 up 2.5% by the time the ticker tape had been cleared.

The rally continued after his inauguration, with the index peaking 6.3% higher by mid-February.

Since then, however, a “Trump slump” has sent markets crashing back to where they started, accelerating in the last week of unpredictable moves.

Money blog: Pound set for rise against dollar

The reality of an economic program built on trade wars saw the S&P hand back all its post-election gains by Tuesday, then fall further as tariffs imposed by executive order were removed by presidential whim.

That Trump turned to tariffs should be no surprise.

They were a central campaign promise, the “most beautiful word” in the president’s limited lexicon. The belligerence and unpredictability with which they have been deployed, however, has left markets spinning.

On Tuesday, Trump placed tariffs on America’s three largest trading partners, two of whom – Mexico and Canada – it has a free-trade agreement with. They both faced 25% levies on exports to the US (10% on the Canadian heavy crude oil on which the US still depends to keep petrol prices down) while levies on Chinese imports doubled to 20%.

Within 48 hours, the measures against Mexico and Canada were paused, leaving US businesses, economists, and trading partners wondering whether, for all his bluster, market sentiment could be a brake on the president’s ambition.

That tariffs are costly, disruptive and divisive is not in question.

Faced with huge price rises, importers have two choices: to absorb the additional cost by cutting profit margins, investment and ultimately growth, or pass them on to customers, increasing prices.

The impact was broad and immediate, sowing confusion and chaos.

The US car industry and its suppliers saw three changes to trading arrangements in 48 hours; executives of major retailers including the giant Target warned of price increases; while three north-eastern US states faced soaring energy bills as a result of counter-tariffs from Ontario that threatened supply.

Unclear motivation

What is less clear is whether Trump’s motivation is economic or political.

Treasury secretary Scott Bessent suggested on Friday it is both.

In an interview with CNBC, he said the tariffs were intended to address America’s fentanyl crisis, providing leverage to persuade Canada and Mexico to tackle cross-border smuggling, and China to curb the flow of precursor chemicals.

But Mr Bessent also insisted the Trump program will require consumers to “detox” from government support while they wait for the private sector to provide the jobs and wage growth required to outpace inflation.

That sounds like a more fundamental reset, one in which the value of the dollar, falling all week, is less of a priority.

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For the president and some of those close to him, tariffs are ideological.

Their protectionist argument is that cheap imported consumer goods have hollowed out American manufacturing, with the resulting trade deficits amounting to a tax on American jobs.

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Trump’s worldview explained

Imposing tariffs runs the theory, discourages imports and encourages manufacturing at home.

But that is a long-term correction, with the short-term cost borne by American companies and consumers and, in turn, a global economy that still orbits around the US.

There will be further tests in the coming weeks, with the White House due to announce a global reciprocal tariff regime, including the EU and UK, on 2 April.

By then we may have a better sense of whether Mr Trump’s popularity, and his ego, can withstand a market downturn, rising prices, and the criticism that would come with them.

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Trump says he hopes to get ‘prime territory’ back for Ukraine as he prepares for Putin summit

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Trump says he hopes to get 'prime territory' back for Ukraine as he prepares for Putin summit

Donald Trump has said he would try to return territory to Ukraine as he prepares to meet Vladimir Putin and lay the groundwork for a deal to bring an end to the war.

“Russia has occupied a big portion of Ukraine. They’ve occupied some very prime territory. We’re going to try and get some of that territory back for Ukraine,” the US president said at a White House news conference ahead of Friday’s summit in Alaska.

Mr Trump also said: “There’ll be some land swapping going on. I know that through Russia and through conversations with everybody, to the good of Ukraine.”

He said he’s going to see what Mr Putin “has in mind” to end the three-and-a-half-year full-scale invasion.

Donald Trump speaks to reporters at the White House. Pic: Reuters
Image:
Donald Trump speaks to reporters at the White House. Pic: Reuters

And he said if it’s a “fair deal,” he will share it with European and NATO leaders, as well as Volodymyr Zelenskyy, who have been liaising closely with Washington ahead of the meeting.

Asked if Mr Zelenskyy was invited to the summit with Mr Putin in Alaska, Mr Trump said the Ukrainian leader “wasn’t a part of it”.

“I would say he could go, but he’s gone to a lot of meetings. You know, he’s been there for three and a half years – nothing happened,” Mr Trump added.

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The US president said Mr Putin wants to get the war “over with” and “get involved” in possible talks but acknowledged Moscow’s attacks haven’t stopped.

“I’ve said that a few times and I’ve been disappointed because I’d have a great call with him and then missiles would be lobbed into Kyiv or some other place,” he said.

Mr Trump said he will tell Mr Putin “you’ve got to end this war, you’ve got to end it,” but that “it’s not up to me” to make a deal between Russia and Ukraine.

Vladimir Putin is set to meet Donald Trump in Alaska. Pic: Reuters
Image:
Vladimir Putin is set to meet Donald Trump in Alaska. Pic: Reuters

Zelenskyy says Russia ‘wants to buy time’

Ukrainian President Volodymyr Zelenskyy has said Russia “wants to buy time, not end the war”.

“It is obvious that the Russians simply want to buy time, not end the war,” he wrote in a post on X, after a phone call with Canada’s Prime Minister Mark Carney.

Ukrainian President Volodymyr Zelenskyy. Pic: Reuters
Image:
Ukrainian President Volodymyr Zelenskyy. Pic: Reuters

“The situation on the battlefield and Russia’s wicked strikes on civilian infrastructure and ordinary people prove this clearly.”

Mr Zelenskyy said the two “agreed that no decisions concerning Ukraine’s future and the security of our people can be made without Ukraine’s participation”, just as “there can be no decisions without clear security guarantees”.

Sanctions against Russia must remain in force and be “constantly strengthened,” he added.

European leaders meet ahead of call with Trump

Meanwhile, European officials have been holding meetings ahead of a phone call with Mr Trump on Wednesday.

The European Union’s foreign policy chief, Kaja Kallas, has been speaking to foreign ministers virtually, saying on X that work “on more sanctions against Russia, more military support for Ukraine and more support for Ukraine’s budgetary needs and accession process to join the EU” is under way.

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‘Russians want to carry on fighting’

Over the weekend, European leaders released a joint statement, welcoming Mr Trump’s “work to stop the killing in Ukraine”.

“We are convinced that only an approach that combines active diplomacy, support to Ukraine and pressure on the Russian Federation to end their illegal war can succeed,” read the statement.

It was signed by UK Prime Minister Sir Keir Starmer, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, German Chancellor Friedrich Merz, Polish Prime Minister Donald Tusk, Finland’s President Alexander Stubb, and European Commission President Ursula von der Leyen.

“We underline our unwavering commitment to Ukraine’s sovereignty, independence and territorial integrity,” they said.

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Attacks continue

Despite Donald Trump’s efforts to convince Vladimir Putin to commit to a ceasefire and negotiations, Russian attacks on Ukraine have only intensified in the past few months.

Ukraine’s president has said that, in the past week, Russia launched more than 1,000 air bombs, nearly 1,400 drones and multiple missile strikes on Ukraine.

On 9 July, Russia carried out its largest aerial attack on Ukraine since the start of the war, launching more than 740 drones and missiles, breaking its records from previous weeks.

Furthermore, Mr Zelenskyy has said Russia is preparing for new offensives.

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Trump gaffe reveals how central Putin is to his narrative – with Zelenskyy left out in the cold

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Trump gaffe reveals how central Putin is to his narrative - with Zelenskyy left out in the cold

And then there were two.

It will be a Trump-Putin bilateral summit in Alaska.

Ukraine latest: Trump details talks with Putin

The US president has ruled out a trilateral meeting including Volodymyr Zelenskyy and is framing the talks as low stakes.

He described it as a “feel out” meeting “to see what the parameters” are, and stressed “it’s not up to me to make a deal.”

A strategic preemption perhaps, setting expectations low, and preparing the public for failure.

But he remains wedded to the notion that “land swapping” will shape any deal to end the war in Ukraine.

“Good stuff” and “bad stuff” for both sides, he said, positioning himself as the pragmatic mediator between the two.

He expressed irritation with Mr Zelenskyy’s assertion that he doesn’t have the constitutional power to concede land, though did say he hopes to get “prime territory” back for Ukraine.

Volodymyr Zelenskyy will not be attending the summit. Pic: AP
Image:
Volodymyr Zelenskyy will not be attending the summit. Pic: AP

The dealmaker-in-chief

Mr Trump promised to brief the Ukrainian president and European leaders immediately after his meeting with Mr Putin.

And he voiced confidence in his ability to quickly assess the potential for a deal, boasting his business acumen.

“At the end of the meeting, probably the first two minutes, I’ll know exactly whether or not a deal can be made,” he said.

Asked how he would know, he replied: “That’s what I do, make deals.”

Members of his cabinet nodded in approval.

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Putin ‘wants war to be over’

A law-and-order crackdown in the US capital seems timed to bolster his diplomatic stance.

He branded crime in Washington “a national emergency”, took federal control of police and deployed the National Guard.

It may seem strange that Mr Trump is talking about “taking back” Washington, ahead of a rare summit with Mr Putin.

But he’s positioning himself as bold and uncompromising before he faces a man deemed bold and uncompromising.

A telling gaffe

And he conflated the two, saying: “This is a tragic emergency, and I’m going to see Putin, I’m going to Russia on Friday.”

He isn’t going to Russia. He’s going to Alaska. But that gaffe revealed how central Mr Putin is to his narrative, even domestically.

Vladimir Putin has been reluctant to meet his Ukrainian counterpart. Pic: Sputnik/Reuters
Image:
Vladimir Putin has been reluctant to meet his Ukrainian counterpart. Pic: Sputnik/Reuters

Mr Putin wants to lock in the gains Russia has made since invading Ukraine, while Mr Trump presses for a ceasefire.

But it’s hard to envisage any ice-breaking peace deal emerging from Friday’s summit in Alaska.

How could there be when Mr Zelenskyy is out in the cold?

For now, this is a Trump-Putin power play.

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Donald Trump will deploy National Guard troops to Washington DC to ‘re-establish law and order’

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Donald Trump will deploy National Guard troops to Washington DC to 're-establish law and order'

Donald Trump has announced he is going to deploy National Guard troops to Washington DC to make the US capital’s streets safer.

At a White House news conference on Monday, the president said the city’s police would come under federal control as he said the murder rate in DC was “higher than” in some of the “worst places on earth”.

He said he was sending in the troops to “re-establish law, order, and public safety”.

Members of the National Guard outside the US Capitol. File Pic: AP
Image:
Members of the National Guard outside the US Capitol. File Pic: AP

Mr Trump said he was announcing a “historic action to rescue our nation’s capital from crime, bloodshed, bedlam and squalor and worse.

“This is liberation day in DC and we are going to take our capital back.”

The president continued: “So today we are declaring a public safety emergency in the district of Columbia.”

He added it is not just about safety but also the “beautification” of the city.

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“Washington DC should be one of the safest, cleanest and most beautiful cities anywhere in the world and we’re going to make it that.”

Last week, the Republican president directed federal law enforcement agencies to increase their presence in Washington for seven days, with the option “to extend as needed”.

A member of the National Guard patrols the area outside of the US Capitol in 2021.
File pic: AP
Image:
A member of the National Guard patrols the area outside of the US Capitol in 2021.
File pic: AP

On Friday night, federal agencies including the Secret Service, the FBI and the US Marshals Service assigned more than 120 officers and agents to assist in Washington.

National Guard troops usually belong to individual states and personnel in many cases are trained to help with emergencies that those states have to deal with, such as natural disasters.

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Since they are the reserve force of the US military, National Guard troops are usually part-time, meaning that they have other jobs as well.

Minority leader of the US House of Representatives, Hakeem Jeffries, responded to Mr Trump’s announcement on Monday with a post on X which read: “Violent crime in Washington, DC is at a thirty-year low.

“Donald Trump has no basis to take over the local police department. And zero credibility on the issue of law and order.

“Get lost.”

In a social media post on Sunday, Mr Trump emphasised the removal of Washington’s homeless population, though it was unclear where the thousands of people would go.

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“The Homeless have to move out, IMMEDIATELY,” Mr Trump wrote.

“We will give you places to stay, but FAR from the Capital. The Criminals, you don’t have to move out. We’re going to put you in jail where you belong.”

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