(Aug 12): Stock markets around the world tumbled last week and volatility spiked sharply higher (see Chart 1). The main instigator behind this latest bout of volatility is — yes, you guessed it — US President Donald Trump.

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Trump took markets by surprise, tweeting a 10% hike on the remaining US$300 billion ($415 billion) worth of Chinese imports that are still currently free from taxes, effective Sept 1. This comes right after a high-level trade meeting ended in Shanghai. Talks were supposed to continue in the US in September, but Trump was upset that China did not sign off on a concrete deal to buy US farm products.

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