- Trump signaled potential U.S. regulatory action to curb illegal short selling, echoing international moves like South Korea's recent reforms.
- He criticized market reactions to good news, advocating a return to times when positive announcements lifted stock prices.
- Social media and analysts linked his remarks to concerns about naked shorting and broader market manipulation protections.
In a speech at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in Gyeongju, South Korea, President Donald Trump addressed the complexities of global financial markets, hinting at potential reforms in the United States that could impact short selling practices.
This development comes as South Korea, which recently lifted a 16-month ban on short selling, continues to grapple with regulatory measures aimed at curbing illegal “naked shorting” trades.
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During his address, Trump criticized the current state of market reactions to good news, stating, “You know, in the old days when you announced good news, the stock market went up. Now that you’ve announced good news, the stock market goes down because people say, ‘Oh! That’s terrible. You’re doing well. Interest rates will go up.'”
He expressed a desire to return to a time when positive announcements boosted market confidence, suggesting, “We’re gonna go back to the way it used to be when we announce good news, the stock markets are going to go up.”
Will the Administration Answer Retail Investors’ Prayers?
This rhetoric has sparked speculation about potential U.S. policy shifts, particularly in light of South Korea’s recent regulatory actions.
South Korea’s Financial Services Commission lifted the short-selling ban on March 31, 2025, after implementing systemic reforms to enhance market integrity.
The ban, initially imposed in November 2023 due to instances of naked short selling by global banks, was part of a broader effort to protect retail investors, who account for over 50% of the market trading volume.
KB Securities’ Managing Director Peter Kim noted, “Retail investors account for more than 50% of the market trading volume, making the local stock market a key political issue for the Korean government.”
The resurgence of naked short selling, which involves shorting stocks without borrowing them and is illegal in South Korea, prompted the full reinstatement of the ban in November 2023.
However, the latest lifting of the ban was accompanied by strengthened penalties and a new system to detect such practices, reflecting a commitment to market stability and fairness.
Trump’s comments at the APEC summit have been interpreted by some as a subtle nod to these international regulatory trends.
Community Sentiment on X
X Market News highlighted the connection, stating, “President Trump Exposes the Stock Market, Hints at Cracking Down on Short Sellers,” and linked his speech to South Korea’s actions.
The post noted, “During a speech in South Korea, which recently banned short selling to probe illegal ‘naked shorting’ trades, Trump hinted at major market reforms in the U.S.”
Reactions on social media varied, with users like @Sholi_software calling short sellers “parasites and pests for the market,” while others, such as @luckylion23, clarified that Trump’s comments were more about criticizing Federal Reserve Chair Jerome Powell than directly targeting short sellers.
Despite the mixed interpretations, the discourse around short selling and market regulation has intensified.
The broader context of short selling’s role in global markets was further illuminated by recent events.
For instance, when Trump Media & Technology Group’s stock fell last year, Trump himself blamed “naked short sellers,” a sentiment echoed by critics of the practice.
An industry veteran told Institutional Investor, “The market is rife with fraud and stocks that are totally disconnected from any sense of rational valuation,” underscoring the contentious nature of short selling.
What Happens Now?
As the U.S. considers its regulatory stance, the international landscape offers a comparative lens. China, for example, has maintained strict regulations against naked short selling, reinforcing its position amid market volatility.
Meanwhile, South Korea’s experience demonstrates a balancing act between market freedom and investor protection, a challenge that may influence U.S. policy decisions.
Trump’s speech at the APEC summit, therefore, not only reflects on past market dynamics but also signals a potential future where U.S. regulations might align more closely with global efforts to curb manipulative trading practices.
As discussions continue, the intersection of politics, economics, and market regulation remains a critical area of focus for investors and policymakers alike.
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