President Donald Trump’s recent tariff announcements have sent shockwaves through global stock markets. European markets slumped on Monday after Trump said foreign governments would have to pay “a lot of money” to lift the new tariffs, which he called “medicine.”
Speaking to reporters on Air Force One, Trump indicated he was not worried about the nearly $6 trillion in value already wiped out from US stocks. “I don’t want anything to go down.
But sometimes you have to take medicine to fix something,” he said. Trump’s comments triggered a mass sell-off in Asian markets overnight. Billionaire investor Bill Ackman, a Trump backer, called for a moratorium, saying sweeping tariffs “on our friends and our enemies alike” had caused an “economic nuclear war.
European markets plunged in early trading on Monday.
The FTSE 100 fell as much as 6% before recovering slightly, ending the day down 4.38%. Germany’s DAX and France’s CAC 40 also ended down more than 4%. Japan’s Nikkei 225 index tumbled 8% in Asia, and Hong Kong’s Hang Seng index dropped 12%.
Shares in Chinese tech giants Alibaba and Tencent fell more than 8%. South Korea’s Kospi index trading was briefly halted as stocks plummeted.
Trump tariffs ignite global market disruption
Oil prices continued to sink, with Brent crude falling by more than $10 to $63.84. This further pushed shares in oil majors like BP and Shell down. Gold prices rose slightly to $2,362 as investors sought a haven.
Trump said he had spoken over the weekend to leaders from Europe and Asia who hope to convince him to lower the tariffs, which are, which are set to reach up to 50% this week. “They are coming to the table. They want to talk,, but there’s no talk unless they pay us a lot of money on a yearly basis,” he said.
US Treasury Secretary Scott Bessent said more than 50 nations had started negotiations with the US since the tariff announcement. He said there was “no reason” to anticipate a recession, citing strong US job growth last month. However, the uncertainty stemming from contradictory statements by US officials is dragging down markets, according to UBS Global Wealth Management chief economist Paul Donovan.
“If the competence of policymaking is questioned, markets will worry that economic damage will be lasting,” he said. Goldman Sachs has increased the probability of a global recession over the next 12 months from 35% to 45%. White House economic adviser Kevin Hassett denied the tariffs were part of a strategy to crash markets to pressure the Federal Reserve to cut interest rates.
