Global markets plunged as President Trump’s abrupt imposition of high tariffs on Chinese goods deepened a worldwide rout. China retaliated, sending stock markets in Europe and Asia into a tailspin. Germany’s DAX opened down 9% in Europe, while London’s FTSE was about 5% lower.
Asian markets saw even more significant declines. Japan’s benchmark Nikkei 225 index closed 7.9% lower, while Hong Kong’s Hang Seng index had its worst single trading day since 1997, closing more than 13% lower. Washington’s shock decision to impose a 34% tariff on Chinese goods dealt a direct blow to core export sectors like semiconductors and EVs, triggering a sharp and broad-based repricing across Asian markets,” wrote Dilin Wu, a research strategist at Pepperstone.
South Korea’s Kospi finished 5.6% lower, with tech giant Samsung tumbling more than 5%. Even traditionally safe assets like gold were being sold off, with prices dropping more than 4% to around $3,030 an ounce since Thursday. Oil prices continued to slide Monday following last week’s losses.
Brent futures, the global benchmark, dropped more than 2.4%, while U.S. West Texas Intermediate crude futures declined by 2.5%.
Tariffs escalate, markets plunge globally
US stock futures plunged Sunday evening, erasing over $5.4 trillion in market value.
Friday saw US stocks fall sharply after China imposed a retaliatory 34% tariff on all US goods. China’s ruling Communist Party declared in its official newspaper that the country has a “strong capacity to withstand the pressure” from US tariff actions. Taiwanese President Lai Ching-te stated that Taipei will negotiate with Washington to eliminate tariffs on both sides.
Japan’s Prime Minister Shigeru Ishiba also intended to negotiate with the US. Bill Ackman, CEO of Pershing Square, criticized Trump’s tariff policies, stating they risk inciting an “economic nuclear war.” He urged the President to reconsider his approach to avoid a prolonged global economic downturn. President Trump downplayed concerns, saying, “What’s going to happen with the market?
I can’t tell you. But I can tell you, our country has gotten a lot stronger, and eventually, it’ll be a country like no other.” He indicated a willingness to negotiate with China but emphasized the need to address the trade deficit. Economists at Barclays said Monday that they hold a “cautious view” on the ability of Asian governments to negotiate successfully with the US to bring down tariffs.
They have started trimming economic growth forecasts for the region accordingly.
