Equity markets were hit hard Thursday after U.S. President Donald Trump implemented sweeping tariffs, escalating fears of a global trade war that could spark recessions and inflate prices. The market responded with severe losses, especially in Asia, where Tokyo’s Nikkei index plummeted over 4%. U.S. futures dropped sharply, gold hit an all-time high, and the Japanese yen surged amidst concerns that retaliatory tariffs could worsen the crisis.
Trump announced these tariffs as part of his “Liberation Day” speech, claiming the U.S. had been “looted” by other nations. The new levies include a 34% tariff on China, 20% on the European Union, and 24% on Japan, along with other country-specific tariffs. A general 10% tariff will apply to most other nations, with auto tariffs of 25% coming into effect.
Retaliation from other nations was swift. China pledged countermeasures, while Japan and the EU condemned the tariffs, warning of potential violations of World Trade Organization rules. Canadian Prime Minister Mark Carney emphasized his country’s intent to protect its workers with counter tariffs.
Stephen Innes from SPI Asset Management described the move as an “aggressive trade shock” that could have severe consequences on inflation and growth. The global stock market felt the immediate impact, with significant losses in various regions. Asian markets like Hong Kong, Manila, and Seoul saw steep declines, while Wall Street futures also experienced substantial drops.
Investors flocked to safe-haven assets, driving gold prices to a new record of $3,167.84, while the yen strengthened. The economic fallout extended beyond the stock markets, with oil prices dropping due to fears of reduced global demand.
Corporate giants were also affected, including major Japanese and South Korean companies such as Sony, Toyota, and Samsung, which saw their stock prices fall significantly. Companies in e-commerce were also impacted, particularly after Trump removed the duty-free exemption for small parcels from China, affecting Alibaba and JD.com.
J.P. Morgan’s Tai Hui expressed concerns that these tariffs could dampen U.S. consumer spending and delay business investments, further threatening global economic stability.
Key Market Figures (0400 GMT):
- Tokyo – Nikkei 225: DOWN 3.4% at 34,528.09
- Hong Kong – Hang Seng Index: DOWN 1.6% at 22,835.91
- Shanghai – Composite: DOWN 0.5% at 3,333.09
- Gold: NEW HIGH at $3,167.84 per ounce
- Dollar/Yen: DOWN to 147.50 yen from 149.39 yen
- WTI Oil: DOWN 2.3% at $70.06 per barrel
