The rapid onslaught of the coronavirus, financial market panic and the crash of global energy prices is setting up Donald Trump for one of the biggest challenges of his presidency, say analysts and former US government officials. Unlike other tests he has faced since he took office in January 2017 – including the trade war with China, his aggressive immigration policies and the killing of Iranian general Qassem Soleimani – the latest events are external shocks that he did not engineer. That, they say, could challenge his usual ability to shape the narrative. The current blows are also hitting Americans where they live, they add, and could test the limits of Trump’s unique governing style as he works to stave off a possible US and global recession in an election year. “The outlook for a recession is very, very high,” said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics. “And US presidents tend not be re-elected in recession years or when unemployment declines significantly, even from a high level.” That said, experts acknowledge that any assessment depends heavily on how hard and fast the pandemic hits and how quickly economic and political confidence is restored. Clearly, the administration’s challenges are rising. The US stock market suffered its largest drop since the 2008 financial crisis on Monday and has yo-yoed since then, and officially entered bear-market territory with a drop of nearly 6 per cent on Wednesday. Russia and Saudi Arabia started an oil price war that threatens to bankrupt US energy companies and hammer American banks. US consumer spending, the largest driver of the US economy, is highly vulnerable to a lengthy corona outbreak. And also on Wednesday, the World Health Organisation declared the coronavirus outbreak a global pandemic. This week, former Treasury secretary Lawrence Summers predicted an 80 per cent probability of a US recession and, in an interview with Bloomberg, called for a US$500 billion stimulus package by summer’s end. This comes amid economic downturns in China, Japan, Germany, Italy and Britain, among other nations. And surveys by Quartz and Moody’s Analytics rated the probability of a recession within a year double what it was a month ago, although it remained below 50 per cent. Trump says ‘no reason to panic’ as US reports first coronavirus death Trump’s political fortunes could depend on how he is seen as leader in a time of crisis as the world looks for reassurance and steady hands. The early reviews have not been good. Instead of relying on experts to help make informed policy choices, Trump has tended to play down health risks, talk up markets and tout cheaper gasoline. “We're prepared. We're doing a great job with it,” Trump said on Tuesday. “Stay calm and it will go away.” But as Andrew Yang, former Democratic presidential candidate and now a CNN commentator, observed on Tuesday night: “Nothing makes you appreciate a functioning government like a global pandemic.” Traditionally during global crises, US presidents have stepped up to help build consensus and craft a coordinated approach. But that could be difficult given Trump’s many trade wars, “America First” policies and distrust of multilateral groupings, analysts say. “This is the time we should be working with other countries. It’s not just a national issue, this screams out for a global response,” said one former administration official. “And vis-à-vis China, I understand there’s a lot of tension in the relationship. But I always thought there were issues where we should cooperate. And this is a prime candidate.” “It’s unfortunate that both sides seem to be throwing barbs at each other rather than working to address the health crisis,” the official added. European leaders say fight against coronavirus is just starting As the political stakes have risen, Trump appears to be taking the threat more seriously, floating plans this week to stimulate the economy and try to stem the panic. Among the proposals under consideration are expanding loans to small businesses, increasing paid sick leave and extending tax relief for the hospitality industry. His administration also said it planned to delay the April 15 deadline for paying income taxes. On Wednesday, congressional Democrats and the White House worked to put together the first batch of emergency stimulus measures. Treasury Secretary Steven Mnuchin, speaking to lawmakers, said he hoped to reach agreement on a relief package within 48 hours and get it to Trump for his signature. But many of the economic stimulus measures under consideration could be difficult to implement quickly, analysts said. While Trump has relied heavily on executive orders in order to bypass the legislative branch – as did President Barack Obama before him – most of the fiscal stimulus measures under consideration require congressional approval. Any rapid passage of legislation could be frustrated by the open distrust Trump has expressed toward opposition Democrats, whose cooperation he needs. “This is their new hoax,” he said at a recent rally, blaming Democrats for focusing on the coronavirus. Trump’s focus on stocks, and tendency to see rising markets as a measure of his performance, also presents political challenges. “The virus can only hurt President Trump if he makes false claims about it or is thought not to be taking it seriously enough,” said Sean King, senior vice-president at Park Strategies and a former Commerce Department official. “A stock market that doesn’t recover can really hurt him, however, as he’s so far used the market as a way to keep score throughout his presidency.” While markets, and the Trump administration, want a rapid policy response to help calm investors, even emergency measures in Congress can take weeks. Congress also has scheduled breaks coming up, significant differences over spending priorities and growing virus-related fear among members about remaining in Washington. “When Congress does act, it almost guarantees it will be insufficient from the market’s standpoint,” said Henrietta Treyz, economic policy director with consultancy Veda Partners and a former congressional staffer. “Everyone’s very frustrated. Expectations are out of alignment.” Governments around the world have been sorely tested by the pandemic and the enormous challenges it presents. But Trump’s impatience with process, experts and what he calls the “deep state” has hobbled the government’s ability to respond rapidly, critics say. “The US has squandered the time that China bought us in part because the policy apparatus in charge of a response has been completely hollowed out under the current administration,” said Megan Greene, a senior fellow at the Harvard Kennedy School. “There does seem to be some insularity that isn’t unique to the US – a feeling that this is striking places far away but couldn’t interfere in our lives the same way,” she added. Mixed US coronavirus messages: top official warns of spread, Trump downplays it In 2018, the Trump administration dismantled a global health security team under the National Security Council responsible for coordinating the US response in the event of a deadly pandemic. That same year, it cut by 80 per cent funding to the Centres for Disease Control and Prevention earmarked for preventing global disease outbreaks, scaling back coordination with China. And it has eliminated a US$30 million Complex Crises emergency response fund used for deploying disease experts in an outbreak. Trump’s continued belief that the health threat and related economic fallout will be limited, combined with his focus on loyalty and deference, has left cabinet members reluctant to take preventive measures, analysts say. And it has led to a muddled crisis management response as senior health officials relay contradictory messages or avoid speaking out. “The lack of unity or clear messaging from the White House is keeping the odds of a stimulus deal passing this week lower than the market is anticipating,” said Treyz. “The White House’s message that the economy is strong and resilient is at sharp odds with the signals coming from the market.” That said, pundits have frequently underestimated Trump’s ability to disarm political opponents, exploit divisions and coalesce pockets of support around himself. Thomas J. Duesterberg, senior fellow with the conservative Hudson Institute, discounts the idea that voters or companies will blame Trump for the virus or his managing the crisis. “It’s hard for me to see how public at this point can blame anyone for coronavirus outbreak,” he said. “A lot depends on how serious the spread of this is.” American presidents tend to lead by example, but some say Trump’s personal response has sent the wrong message. Even as conventions, festivals, sporting events and Democratic candidates’ speeches are cancelled to discourage mass gatherings, Trump has continued holding large rallies and shaking hands with supporters. He has also opted not to get tested despite having spoken at a conservative conference late last month attended by confirmed carriers of the coronavirus. “I spoke to the White House doctor, a terrific guy, a talented guy, and he sees no reason to do it,” Trump told reporters on Tuesday. “There’s no symptoms.” Trump to push for tax break to combat economic fallout from coronavirus The loyalty Trump commands from his base and America’s deeply divided electorate has seen even disease become a partisan issue. Recent surveys, including one by Quinnipiac University, suggest that Republicans are significantly less likely than Democrats to take the virus seriously, or take personal health precautions, believing the risks are exaggerated. But pollsters add that this gap could narrow as the disease spreads. “He’s continued to hold political rallies,” said Kirkegaard. “He’s more concerned with ‘fake news’ rather than convincing his own supporters they should protect themselves.” “Trump’s inaction is going to cost lives,” he added. “The silence from the White House has been deafening.” Purchase the China AI Report 2020 brought to you by SCMP Research and enjoy a 20% discount (original price US$400). This 60-page all new intelligence report gives you first-hand insights and analysis into the latest industry developments and intelligence about China AI. Get exclusive access to our webinars for continuous learning, and interact with China AI executives in live Q&A. Offer valid until 31 March 2020.