Global markets plunged on Monday as President Donald Trump’s high tariffs and China’s forceful response deepened a global stocks rout. Germany’s Dax opened down 9%, while London’s FTSE was about 5% lower. European markets fared somewhat better than Asian markets in early trade.
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 Hong Kong, the benchmark Hang Seng index closed more than 13% lower in its worst single trading day since 1997.
The Shanghai Composite Index closed 7.3% lower in mainland China. Washington’s shock decision to impose a 34% tariff on Chinese goods dealt a direct blow to core export sectors like semiconductors and electric vehicles, triggering a sharp and broad-based repricing across Asian markets,” wrote Dilin Wu, a research strategist at Pepperstone in a note. Asian markets tracked the worst two-day stretch for Wall Street stocks in five years, with US stock futures plunging Sunday evening, wiping away over $5.4 trillion in market value.
US stocks had fallen sharply on Friday after China imposed a 34% tariff on all US goods. The People’s Daily, the ruling Chinese Communist Party’s official mouthpiece, stressed that the country has a “strong capacity to withstand the pressure” in the face of “US tariff bullying.” It stated, “Faced with America’s reckless tariff punches, we have plenty of countermeasures at hand.”
Taiwan’s Taiex closed down 9.7% on Monday. Almost all Taiwanese stocks, including TSMC and Foxconn, triggered circuit breakers, falling about 10%.
Markets in turmoil
Oil prices continued to slide, with Brent futures dropping more than 2.4% and US West Texas Intermediate crude futures declining by 2.5%. In Australia, the benchmark ASX 200 index closed 4.2% down, while New Zealand’s NZX 50 ended 3.7% lower.
South Korea’s Kospi finished 5.6% lower, with Samsung tumbling more than 5%. Even gold has dropped by more than 4% to around $1,030 an ounce since Thursday. US stocks were set to open sharply lower on Monday, putting the S&P 500 on the precipice of a bear market.
Billionaire CEO Bill Ackman implored Trump to call a timeout on tariffs to avoid an “economic nuclear war.
Trump told reporters he didn’t intentionally crash markets but declined to predict future stock performance. “What’s going to happen with the market? I can’t tell you,” he said.
“But I can tell you, our country has gotten a lot stronger, and eventually, it’ll be a country like no other.”
The president laid out what it would take to reach a deal with China on tariffs. “I’m willing to deal with China, but they have to solve their surplus,” he said. We have a tremendous deficit problem with China.”
Japanese Prime Minister Shigeru Ishiba said he would continue to appeal to the US to reduce tariffs.
Taiwan’s President Lai Ching-te said Taipei will negotiate with Washington to eliminate tariffs on both sides and actively resolve non-tariff trade barriers. Economists at Barclays said they take a “cautious view” on the ability of Asian governments to negotiate with the US to bring down tariffs successfully and have started trimming economic growth forecasts for the region.
Image Credits: Photo by Vladislav Klapin on Unsplash
