US looks like ‘problematic emerging market’ – former Treasury chief

Former US Treasury Secretary Lawrence H. Summers has warned that President Donald Trump’s escalating tariff war is pushing the United States toward a financial crisis, comparing recent market turmoil to conditions typically seen in unstable emerging economies.

Speaking on Wednesday, before Trump announced a surprise 90-day pause on the latest round of tariff hikes, Summers said the volatile situation unfolding in American and global markets was “wholly induced by US government tariff policy.”

“Long-term interest rates are gapping up, even as the stock market moves sharply downwards,” Summers wrote in a series of posts on X. “This highly unusual pattern suggests a generalized aversion to US assets in global financial markets. We are being treated by global financial markets like a problematic emerging market.”

Summers, who led the Treasury Department under President Bill Clinton, warned that the combination of rising government debt, widening deficits, and foreign investor anxiety could trigger a dangerous downward spiral. “This could set off all kinds of vicious spirals, given government debts and deficits and dependence on foreign purchasers,” he cautioned…