Stock markets across Asia fell sharply after US President Donald Trump imposed new import tariffs. Major indexes in countries like China, Japan, South Korea, and Australia opened with steep losses on Monday morning. By midday, Japan’s Nikkei 225 dropped 6%, South Korea’s Kospi fell 4.7%, and Australia’s ASX 200 declined by 4%.
In China, the Shanghai Composite Index plunged over 6%. Hong Kong’s Hang Seng and Taiwan’s Weighted Index each dropped around 10%. These markets had been closed on Friday for public holidays and were catching up with global losses seen late last week.
Trump’s Tariffs Spark Widespread Concern
President Trump recently announced sweeping 10% import duties on products from all countries. This includes key US trade partners such as China, the European Union, and Vietnam. The move triggered fears of a full-blown global trade war.
Many Asian economies depend heavily on exports. Therefore, Trump’s tariffs have caused immediate concerns in the region. These countries not only produce large amounts of goods for global consumption but also rely on the US as a major customer.
Analysts Warn of Rising Risks
Market experts are sounding the alarm. Julia Lee from FTSE Russell said, “Tariffs are feeding into expectations around inflation and a recession.” Investment banks have already adjusted their economic forecasts.
Goldman Sachs raised the likelihood of a US recession in the next 12 months from 35% to 45%. JPMorgan went even further, predicting a 60% chance of both a US and global recession.
Qian Wang, chief economist for the Asia Pacific at Vanguard, added, “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. This is negative to the global and Asia economy, especially those small open economies, both in the short term and long term.”
US and European Markets Also Tumble
The impact isn’t limited to Asia. On Friday, all three major US stock indexes closed more than 5% lower. The S&P 500 dropped nearly 6%, marking the worst week for Wall Street since 2020.
In the UK, the FTSE 100 dropped by almost 5%, its worst single-day fall in five years. Stock markets in France and Germany also experienced major declines.
Julia Lee warned the turmoil may not be over. “US futures trading lower point to another hard session on Wall Street tonight,” she noted.
Trillions Wiped from Global Markets
Since Trump made the announcement, stock markets worldwide have lost trillions of dollars in value. Investor confidence has plummeted amid fears of trade disruptions, rising prices, and slowing economic growth.
While some believe a negotiation is still possible, most analysts agree that the risk of long-term damage to the global economy is growing.