Global Markets Plummet as Trump’s Tariff Hike Escalates Trade War Fears
Wall Street and Global Market Downturn
On Thursday, Wall Street and global markets took a major hit following US President Donald Trump’s announcement of new tariffs on imports from various countries. This decision has intensified fears of an escalating trade war and increased recession risks, according to the Associated Press.
- S&P 500 futures fell by 3.4%
- Dow Jones Industrial Average futures dropped 2.8%
- Nasdaq futures plunged 3.8%
Oil prices also declined by more than 4%, and the US dollar reached its lowest level against the Japanese yen since early October.
Trump’s Tariff Announcement
After the US market closed on Wednesday, Trump revealed a 10% baseline tariff on imports from all countries, along with higher tariffs on nations with trade surpluses with the US. Notably, China will face a 34% tax on imports, while the European Union will be charged 20%, and Taiwan will face 32%.
Asian Markets Impact
Although somewhat protected by the expectation of further stimulus from Beijing, Asian markets still experienced the effects of the news:
- Hong Kong’s Hang Seng index fell 1.7%
- The Shanghai Composite dropped 0.2%
Economists’ Warnings
Economists caution that these measures could hinder growth for the US and the global economy, while increasing inflation, which is already above the Federal Reserve’s 2% target.
Treasury Yields and Commodity Market Losses
Treasury yields fluctuated significantly, reflecting the uncertainty in the markets. The 10-year Treasury yield dropped to 4.04% before settling at 4.11%, down from 4.23% late Wednesday and nearly 4.80% earlier this year.
The commodity market also experienced significant losses:
- US benchmark crude oil lost $3.36, or 4.7%, to $68.35 per barrel
- Brent crude fell $3.29, or 4.4%, to $71.66 per barrel
European and Asian Market Slumps
Markets in Europe and Asia also declined, with various losses reported across different indices.
