If any evidence were needed that US President Donald Trump’s political fortunes are closely tied to the stock market – leaving aside the Covid-19 factor – it is to be found in his negotiations with congressional Democrats on an economic stimulus package a few weeks before the next election. The outcome, in the world’s biggest economy, is not just a domestic issue, but globally important, especially for the Asian and European economies. News of negotiations on an offer by Trump of a US$1.6 trillion package buoyed American markets; news that he had shut them down until “I win [the election]”, after Democrat leader Nancy Pelosi demanded more generous aid for state and local governments, depressed them. His attempt to shift the blame for failure of the negotiations to the Democrats had misfired. Further news, in less than a day, that he was prepared to backtrack on his walkout and talk about some elements of the package perked them up again. The backflip was not long in coming. If Trump needed his campaign advisers to tell him that allowing politics to get in the way of economic recovery measures was bad for market sentiment and not good for his hopes of re-election, he did not take long to heed their counsel. Moreover, the chairman of the Federal Reserve, Jerome Powell, had warned that failure to inject more money into the economy would risk weakening recovery. Trump’s initial fallback position was to urge Congress to revive a lapsed loan programme for small business, and approve funds to head off airline sackings and underwrite a fresh round of individual stimulus cheques worth US$1,200 each. Pelosi proposes a new round of stimulus worth US$2.4 trillion. US stimulus hopes evaporate: blame Democrats or Trump on steroids? Unless negotiations get back on track, many American households and businesses big and small could face financial distress sooner rather than later, which would be bad for global recovery. There are times when putting politics ahead of bipartisanship is bad politics. The Covid-19-induced economic slump is one of them. Voters look to presidents for leadership in a crisis. That means Trump needs to carry Congress with him, even if it involves giving some ground instead of accusing Pelosi of seeking money for Democrat states.