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Global Markets React Sharply to Trump Tariff Announcement
Trump Tariffs Trigger Asian Stock Market Plunge: Asian stock markets experienced a sharp downturn as trading commenced, reacting swiftly to the announcement of new trade tariffs by former US President Donald Trump. The stock market declines were led by Tokyo’s Nikkei index and Australian shares, signaling widespread investor concern over potential global economic repercussions.
Asian Markets Deep Dive
Tokyo’s Nikkei index plummeted by 3.4% at the opening bell following the Trump tariffs announcement, while shares in Australia also suffered a significant drop of 2%.
- Nikkei 225: The benchmark Nikkei 225 index sank 3.42%, a substantial 1,222.77 points, reaching 34,503.10 in early trading.
- Topix Index: The broader Topix index also decreased considerably, falling 3.32%, or 87.93 points, to 2,562.36.
- Nikkei Futures: Indicating further market anxiety, Nikkei average futures dropped by 6% in the minutes leading up to the market open, as reported by Reuters.
Australian Market Slumps
In Australia, the S&P/ASX 200 index witnessed a sharp decline, falling as much as 2.1% to 7,768 points by 0002 GMT. This marked the index’s most significant intraday loss since December 19, 2024.
Jessica Amir, a market analyst from the trading platform Moomoo, commented, “Stocks are diving following Trump unveiling tariffs that will hurt most global companies, Australian farmers, and investors alike.”
South Korea Vows Response to Trade Crisis
South Korea’s acting President Han Duck-soo has instructed government agencies to implement emergency support measures for businesses anticipating negative impacts from the 25% US tariffs, particularly within the automobile sector, according to the industry ministry.
President Han has tasked the industry minister with a detailed analysis of the tariffs and to proactively engage in discussions with Washington to lessen the effects of these reciprocal tariffs. According to the ministry, Han stated:
As the global trade war has become a reality, the government must dedicate all its resources to overcome this trade crisis.
In his address, Trump specifically mentioned South Korea and Japan, key US allies in Asia, accusing them of unfair trade practices against the United States.
Further discussions are scheduled for Thursday, involving Finance Minister Choi Sang-mok and Industry Minister Ahn Duk-geun, to evaluate the tariffs’ broader implications on financial and foreign exchange markets. These meetings will also address strategies for engaging with the US and formulating comprehensive government and business responses, as reported by Yonhap news agency.
Market analysts in Seoul have characterized Trump’s extensive tariff measures as more severe than initially anticipated, generating uncertainty for the heavily export-dependent South Korean economy.
Park Sang-hyun, an economist at iM Securities, warned, “For the domestic economy, a substantial blow is unavoidable.”
“It is evident that major export sectors, like automobiles, will be severely affected, and exports to the US from production facilities in Vietnam will also suffer considerably,” Park added in his analysis.
German Auto Industry Condemns Tariffs
The German Automotive Industry Association (VDA) issued a statement asserting that the new US tariffs “will only create losers,” with US consumers being particularly vulnerable. The VDA urged the EU to “act unitedly and decisively, while continuously signaling a willingness to negotiate.”
The VDA, representing Germany’s influential automotive sector, described the tariffs as:
…the United States’ departure from the rules-based global trade order – and consequently a move away from the very principles underpinning global value creation, growth, and prosperity in numerous regions worldwide.
This approach is not “America First”; it is “America Alone.”
Furthermore, the VDA called on the EU to expedite negotiations for free trade agreements with other nations. The association emphasized the EU’s role as a “champion for free and equitable global trade” and appealed to the incoming German government to assume a leading role in these crucial discussions.
US Futures Market Tumbles, Clothing Sector Hit Hard
US futures markets have plummeted dramatically. The Dow Jones Industrial Average futures have decreased by 2.4% around 2345 GMT, while the Nasdaq futures nosedived by 4.2%. The broader S&P 500 futures index also experienced a significant fall of 3.5%, AFP reports indicate.
Wall Street has largely been negatively impacted by Trump’s recent trade policy pronouncements.
Chris Zaccarelli of Northlight Asset Management suggested a potential “silver lining” for investors, noting, “This could merely represent the starting point for discussions with other nations, ultimately leading to a reduction in tariff rates across the board.”
However, he added, “For the moment, traders are reacting impulsively and seeking clarification later.”
Technology stocks, particularly those relying on globally sourced components, experienced sharp declines. Apple shares fell by 7.4% in after-hours trading, Nvidia dropped 5.2%, and TSMC declined by 5.9%.
It is typical for futures markets to exhibit greater volatility compared to standard market indices.
The clothing industry has been particularly affected, especially in China and Vietnam. Products from China will face an additional 34% duty starting April 9th, while Vietnam will encounter a new “reciprocal” rate of 46%.
Brands with manufacturing operations in China or Vietnam have seen considerable stock depreciation. Gap shares fell 8.5% in after-hours trading, Ralph Lauren decreased by 7.3%, and Nike lost 7.1%.
New Zealand Expresses Puzzlement Over Tariffs
New Zealand is set to face a baseline tariff of 10% on all goods imported into the US, as part of Donald Trump’s newly declared global tariffs.
This announcement has surprised officials in New Zealand, who are questioning the US administration’s assertion that New Zealand imposes a 20% tariff rate on US goods – a figure they cannot reconcile with trade data.
Approximately 75% of US goods entering New Zealand are subject to minimal or zero tariffs, with the overall average tariff on US imports standing at about 1.9%. New Zealand’s Trade Minister, Todd McClay, informed the media on Thursday:
New Zealand applies a significantly lower tariff rate to US exports entering our country. I have requested clarification from officials, but a 20% tariff on our end is not accurate.
The US has become New Zealand’s fastest-growing export market, and in 2024, it surpassed Australia to become its second-largest, trailing only China. New Zealand’s exports to the US exceeded NZD $9 billion in 2024, primarily driven by meat, dairy, and wine. These new tariffs could potentially cost New Zealand exporters NZD $900 million.
McClay noted that while the tariff imposition was not entirely unexpected, it will undoubtedly impact New Zealand exporters, some of whom may explore alternative markets. He stated:
The imposition of tariffs anywhere on New Zealand exporters is unwelcome. However, New Zealand exporters are adaptable, highly capable, and globally competitive.
McClay confirmed that New Zealand is not considering retaliatory tariffs against the US.
Implementing retaliatory tariffs would increase costs for New Zealand consumers, leading to inflation.
Gold Prices Reach Record High
The price of gold has surged to a new record high in the wake of the tariff announcements.
Crossing its previous peak of $3,149.14 per ounce around 2300 GMT on Wednesday, gold continued its upward trajectory, climbing above $1,350 per ounce. This surge reflects traders’ flight to gold as a safe-haven asset amidst the sharp downturn in stock market futures.
Yen Strengthens Against Dollar
The Japanese yen has appreciated by 1% against the US dollar on Thursday, according to AFP reports.
In Tokyo’s morning trading session, the dollar’s value fell to 147.69 yen. The Japanese currency, traditionally regarded as a safe-haven asset, rose by 1% compared to its value late on Wednesday.
EU Reaction Expected to be Robust
The European Union is anticipated to respond strongly. The EU has already declared a series of tariffs planned for implementation on US imports, mirroring the US measures by targeting steel and aluminum, alongside textiles, leather goods, domestic appliances, household tools, plastics, and timber.
Sources suggest the EU is also contemplating more drastic measures, including tariffs directed at revenues generated within the EU by major technology and social media companies.
Such actions could be viewed as highly provocative and would potentially affect allies of Trump, such as Elon Musk and Jeff Bezos. It would also pressure EU unity, with Ireland expected to oppose more punitive actions given the significant presence of the US tech sector in Dublin.
Irish Prime Minister Micheál Martin emphasized that any EU response—the EU itself being subjected to a 20% tariff rate—”should be proportionate, aiming to protect the interests of our businesses, workers, and citizens.”
Italian Prime Minister Giorgia Meloni described the new US tariffs imposed on the EU as “wrong” on Wednesday.
The EU prioritizes negotiation and has opted to postpone countermeasures to facilitate dialogue. Maroš Šefčovič, the European Commissioner for Trade and Economic Security, has already engaged with US Commerce Secretary Howard Lutnick. Despite reports that Šefčovič returned from their recent meeting “empty-handed,” he is reportedly employing a strategy akin to the “Brexit playbook,” aiming to cultivate a personal rapport that could prove beneficial during future discussions.
EU President Ursula von der Leyen is expected to issue a response on behalf of the European Commission – which handles trade policy for all 27 EU member states – around 0300 GMT on Thursday, during her official visit to Uzbekistan, approximately three hours from now.
‘1910 Levels’ for Trump Tariff Rate
According to Fitch Ratings’ US economic research head, the US tariff rate on all imports has dramatically increased to 22%, a steep rise from just 2.5% in 2024, due to President Donald Trump’s new global tariffs. Reuters reported:
“This tariff rate is unprecedented since around 1910,” stated Olu Sonola, Fitch’s head of US economic research, following Trump’s announcement of a universal 10% import tax, with even higher rates for numerous trading partners.
“This is a transformative event, impacting not just the US economy but the entire global economic landscape,” Sonola added. “Many nations are likely to face recessionary pressures. Existing economic forecasts are rendered largely obsolete if these tariff rates persist over time.”
Summary of Trump Tariff Announcement and Global Market Reaction
Welcome to our live coverage providing updates and analysis on the reactions to the latest Trump tariffs. These measures, exceeding initial expectations, target major US trading partners and have sent significant shockwaves across global markets.
Jay Hatfield, CEO of Infrastructure Capital Advisors, described the situation as, “This is the worst-case scenario anticipated by the market, with potential to push the US economy into a recession.”
Speaking from the White House Rose Garden, against a backdrop of American flags on what he termed “Liberation Day,” Trump declared sweeping 10% tariffs on imports from nearly all countries worldwide.
He also specified particularly punitive tariffs, including 34% on China, 20% on the European Union, and 24% on Japan, labeling these as “nations that treat us unfairly.”
Furthermore, Trump imposed substantial tariffs on some of the world’s most vulnerable nations, including those battling conflict and natural disasters. Myanmar, currently in civil war and recently hit by a devastating earthquake, faces tariffs of 44%. Similar rates apply to Sri Lanka (44%), with Bangladesh (37%), Cambodia (49%), and Syria (41%) also significantly impacted.
“For decades, our country has been exploited, undermined, and taken advantage of by countries both near and far, friend and foe alike,” Trump asserted.
Wall Street was closed at the time of Trump’s announcement, but the S&P index showed a 1.5% decrease in after-hours trading. The dollar’s value against the euro initially declined by 1% during Trump’s speech but subsequently recovered.
Following the announcement, US stock futures fell, with S&P 500 E-minis dropping 3.5%, and the euro also weakening by 0.3%. Asian markets are now beginning to open, and we will provide continuous coverage of the unfolding developments.
Key points to note:
- The 10% universal tariff is scheduled to take effect on April 5th, while the reciprocal tariffs will be implemented starting April 9th.
- Canada and Mexico have been granted special exemptions, despite previous suggestions that they would be included in broad tariff measures. The White House confirmed that goods under existing trade agreements with Canada and Mexico will remain tariff-free.
- Trump stated the US would only levy half the fees it perceives as unfairly imposed by trading partners on the US, citing American “kindness.”
- Trump specifically criticized industry-specific tariffs imposed by other countries on US exports, citing the EU’s ban on chicken imports, Canadian dairy tariffs, and Japanese rice levies.
- These new tariffs are in addition to existing levies, including a 20% tariff on all Chinese imports, a 25% tariff on steel and aluminum imports, and a 10% tariff on energy imports from Canada.
- Sweeping auto tariffs of 25%, previously announced by Trump, are also set to commence at 12:01 am (0401 GMT) on Thursday.
- US Treasury Secretary Scott Bessent cautioned against retaliatory measures, stating in a Fox News interview, “If you retaliate, there will be escalation.”
- Global leaders have voiced criticism, with Australian Prime Minister Anthony Albanese denouncing the tariffs as “totally unwarranted,” and Italian Prime Minister Giorgia Meloni, a Trump ally, describing them as “wrong.”