Global financial markets crashed Monday, as U.S. stock futures saw fresh selling pressure following the collapse of top indexes last week due to investor concerns about the economic consequences of the Trump administration’s most recent tariff attack.
The Nikkei 225 index in Tokyo fell 7.8%. In mainland China, the Shanghai Composite Index fell 8.4 percent, while Hong Kong’s shares fell more than 12%, marking their worst day in over 16 years. The Taiex dropped 9.7% in Taiwan. The Kospi in South Korea fell 5.6%.
After recovering marginally from a loss of almost 6%, Australia’s benchmark stock index ended the day 4.2% lower.
Following Asia’s markets, European stocks declined, with Britain’s FTSE 100 losing 4.5%, Germany’s DAX falling 6.5%, and Paris’ CAC 40 losing 5.7%.
Futures on stocks
As of 4:08 a.m. EDT, Bloomberg reports that Dow Jones Industrial Average futures had dropped 1,242 points, while Nasdaq futures had lost 685.25 points and S&P 500 futures had lost 181.25.
Following President Trump’s announcement on April 2 of a minimum 10% tax on all U.S. imports and “reciprocal” charges on over 90 countries, stock markets around the world saw a sell-off last week.
While the matching tariffs are scheduled to take effect on April 9, the worldwide tariff went into force on Saturday.
Investors were taken aback by the size of the tariffs, which caused U.S. stocks to plummet to their lowest level in five years and destroyed trillions of dollars’ worth of wealth.
Numerous analysts caution that enacting high tariffs on goods entering the United States might increase inflation, reduce consumer spending, and hinder economic expansion.
China announced Friday that it will impose a 34% tax on all U.S. imports beginning April 10 in retaliation against the United States. Beijing also began taxing American agriculture products, such as chicken, pig, and soy beans, at a rate of 15% in March.
In a note to clients, researchers at Pantheon Macroeconomics warned that “the U.S. and China are now locked in a game of chicken, with the risk of a severe global trade war looming over financial markets.”
Since Mr. Trump announced the most recent tariffs last week, the blue-chip Dow has down 12% and the S&P 500 has dropped almost 14%. The tech-heavy index is in a bear market, which occurs when equities drop at least 20% from their most recent peak, as the Nasdaq has dropped by around 16% during that time.
Tariffs at their highest since 1909
Among other actions directed at U.S. trading partners, Mr. Trump has imposed 25% levies on foreign automobiles, significantly increased import penalties on Chinese goods, and imposed 25% tariffs on imports from Canada and Mexico since reentering the White House in January.
The Yale Budget Lab reports that the average U.S. tariff rate on imports is currently at its highest level since 1909.
Mr. Trump stated on Sunday that unless other countries balance their trade with the United States, he will not remove his tariffs.
Late Sunday, the president told reporters on Air Force One that while he did not want the world’s markets to plummet, “sometimes you have to take medicine to fix something.”
More than 50 nations that are facing the most recent wave of tariffs have asked for discussions, according to senior Trump administration officials who have vehemently defended their trade policy on Sunday.
Howard Lutnick, the secretary of commerce, stated on Sunday’s “Face the Nation” that the tariffs are “definitely going to stay in place for days and weeks.”
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