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Trump’s error-laden 'foreign virus' speech spooks investors

Bloomberg • 3 min read
Trump’s error-laden 'foreign virus' speech spooks investors
The America First presidency collided with a global pandemic on the evening of March 11. The result did not appear to reassure skittish markets or a nervous nation.
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(Mar 13): The America First presidency collided with a global pandemic on the evening of March 11. The result did not appear to reassure skittish markets or a nervous nation. President Donald Trump relied on a familiar playbook as he spoke in a prime-time address from the Oval Office, announcing sweeping new restrictions on travel from Europe and scattered executive actions to help workers and businesses rocked by what he labelled a “foreign virus.”

He blamed allies for not adopting tough immigration measures that he said had prevented a wider outbreak in the US. But the combative approach and small-bore measures seemed only to highlight the president’s struggles to confront the most consequential moment of his presidency.

And even in a 10-minute address, Trump could not stick to the facts. He overstated the European travel restrictions, saying he was “suspending all travel” from the continent, and suggested they would also apply to trade. He tweeted later that trade would not be affected, and the Department of Homeland Security clarified that the restriction applies generally to foreigners who have been in Europe within 14 days.

He said US health insurers had agreed to waive co-payments for coronavirus treatment. A spokeswoman for America’s Health Insurance Plans, a trade group, said its members had agreed only to waive co-payments for testing.

The speech clearly underwhelmed investors, who have been waiting for a “major” economic plan the president promised and has yet to put to paper. “Investors are looking for bold government stimulus. So far we haven’t seen a lot of detail and there isn’t much confidence it will happen quick enough,” said Nathan Thooft, Manulife Investment Management’s head of global asset allocation.

Trump’s most ambitious proposals include a suspension of US payroll taxes, paid sick leave for hourly workers and US$50 billion ($70.3 billion) in additional loans for small businesses. About three hours after his address, House Democrats released their own plan to fight economic fallout which includes free coronavirus testing, paid emergency leave for workers, food security assistance and other measures to help ordinary Americans weather the outbreak.

The address demonstrated that for the president, the coronavirus remains a foreign problem that can be resolved with a characteristically Trump approach: Closing US borders. He hardly acknowledged the spread of the virus within the country, where there are now more than 1,300 cases and 38 people have died.

“We are moving very quickly, and for the vast majority of Americans, the risk is very, very low,” Trump said, once again describing the threat in more optimistic language than US health authorities use. “Young and healthy people can expect to recover fully and quickly if they should get the virus,” he added.

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