Asian stocks from Shanghai to Tokyo and Sydney to Hong Kong plunged on Monday by levels not seen in decades as global markets continue to reel from US President Donald Trump’s tariffs. The Shanghai Composite was down more than 8% at one point, Hong Kong’s Hang Seng dropped more than 13%, and Japan’s Nikkei 225 closed down by 7.8%—moves one analyst described as a “bloodbath”. This follows global slumps last week after Trump announced new tariffs between 10% and 46% on most countries.
This is a blow for Asia’s manufacturing hubs, which count the US as a key market for exports ranging from clothes to cars. These include wealthy allies like Japan and South Korea, which face 26% tariffs, as well as developing countries like Vietnam, which are bracing for a 46% levy. Asia is bearing the brunt of the US tariff hike.
While there could be some room for negotiation, a new regime of higher tariffs is here to stay,” said Qian Wang, Asia Pacific chief economist at investment firm Vanguard. Slumps in mainland China, Hong Kong, and Taiwan were exacerbated as investors caught up with big falls in other markets on Friday due to public holidays. The Shanghai Composite closed 7.3% lower, and Taiwan’s Weighted Index lost 9.7%—its most significant drop on record.
The ASX 200 in Australia lost 4.2,% and the Kospi in South Korea ended 5.6% lower. The Hang Seng closed at a 13.22% drop, its biggest since 2008.
Asian markets plunge amid new tariffs
Tariffs are feeding into expectations around inflation and a recession,” said Julia Lee, head of client coverage at FTSE Russell, a London Stock Exchange Group subsidiary. Goldman Sachs now forecasts a 45% chance of the US falling into recession in the next 12 months, up from a previous estimate of 35%, as the investment banking giant lowered its economic growth forecast. Other Wall Street firms have also revised their recession forecasts after Trump’s tariff announcement.
JPMorgan now sees a 60% chance of a US and global economic downturn. Bangladesh, which exports $8.4bn (£6.5bn) of garments annually to the US, faces a 37% tariff on its products. “Asia is likely to feel a disproportionate brunt of this turmoil because Asia sends more exports to the US than to other markets,” said Frank Lavin, former undersecretary for international trade at the US Department of Commerce.
China has also retaliated with its own tariffs, deepening the trade rift. All three major US stock indexes fell by more than 5%, with the S&P 500 dropping nearly 6%, marking the worst week for the US stock market since 2020. In the UK, the FTSE 100 plunged almost 5%—its steepest fall in five years, while exchanges in Germany and France saw similar declines.
Ms. Lee also highlighted that the global stock market rout is likely to continue: “US futures trading lower points to another hard session on Wall Street tonight.” Global stock markets have lost trillions in value since Trump announced sweeping new 10% import taxes on goods from every country. Products from dozens of countries, including key trading partners such as China, the European Union, and Vietnam, face far higher rates.
