New York, Apr 7 (UNI) Following US President Donald Trump’s ‘reciprocal tariffs’ and China’s aggressive response, global markets plummeted to an all-time low, as the shockwaves triggered from the trade war between the two largest economies of the world had massive international repercussions, with Asian markets tanking.
According to CNN, Germany’s Dax opened down 9%, while London’s FTSE was about 5% lower. European markets were, on the whole, faring better than Asian markets in early trade on Monday. Japan’s benchmark Nikkei 225 index closed 7.9% lower, while the broader Topix finished down 7.7%. Tech giant Sony plummeted more than 10%.
In mainland China, where markets reopened after a public holiday, the Shanghai Composite Index closed 7.3% lower. The blue-chip CSI300 index also lost about 7%. In Hong Kong, the benchmark Hang Seng index last traded just under 12% lower. Chinese tech giants Alibaba and Tencent were each down more than 14% and 10% respectively.
“Washington’s shock decision to impose a 34% tariff on Chinese goods dealt a direct blow to core export sectors like semiconductors and EVs (electric vehicles), triggering a sharp and broad-based repricing across Asian markets,” Dilin Wu, a research strategist at Pepperstone, wrote in a research note.
Trading volumes in Hong Kong surged on Monday, which she said was “a clear sign of widespread forced liquidations and what can only be described as a full-blown panic.”
“Tariffs are feeding into expectations around inflation and a recession,” said Julia Lee, head of client coverage at FTSE Russell, a subsidiary of the London Stock Exchange Group, as reported by BBC.
“Asia is bearing the brunt of the US tariff hike. While there could be some room for negotiation, a new regime of higher tariffs are here to stay,” added Qian Wang, Asia Pacific chief economist at investment firm Vanguard.
“This is negative to the global and Asia economy, especially those small open economies, both in the short term and long term.”
The economic impact of these tariffs has not escaped the US either, as Asian markets are the biggest trade partners of the US resulting in a strong blowback to the American economy.
China’s own tit for tat policy by levying an additional 34% toll on US imports has had detrimental effects on the American aviation sector, as well as the semiconductor and agricultural sector, due to the majority of American manufacturing in these areas relying heavily on Chinese imports for all these sectors.
Since President Trump’s ‘reciprocal tariffs’ and the Chinese attack against it, the US stocks have witnessed their sharpest decline in five years, wiping out trillions in investor wealth, according to CBS News.
Many economists warn that imposing broad tariffs on goods shipped into the US could drive up inflation, chill spending by consumers and hurt economic growth.
The S&P 500 has declined nearly 14% since Trump unveiled the latest tariffs last week, while the blue-chip Dow is down 12%. The Nasdaq has decreased nearly 16% over that period, putting the tech-heavy index in a bear market — when stocks fall at least 20% from their most recent high.
So far, the international stock markets have lost trillions in value since Trump announced sweeping new 10% import taxes on goods from every country, with products from dozens of countries, including key trading partners such as China, the European Union, Japan, Taiwan, India, South Korea, and Vietnam, facing far higher rates.
