Asian and Australian markets suffered a second consecutive day of declines as investors reacted to the sweeping tariffs announced by US President Donald Trump. The tariffs, which take effect tomorrow, have triggered fears of a global economic downturn, leading to widespread sell-offs.
Hours earlier, Wall Street recorded its steepest single-day drop since the 2020 Covid-19 market crash, highlighting investor anxiety over the potential economic fallout.
Despite the market turbulence, Trump remained optimistic, predicting a surge in the US economy.
“The markets are going to boom, the stocks are going to boom, the country is going to boom,” Trump declared, adding that nearly $7 trillion (£5.4tn) in investment could flow into the country once the tariffs are implemented.
The tariffs, which start at a minimum of 10% on global imports, will rise significantly for certain regions, with the European Union facing 20% duties and China set to be hit with 54% levies from 9 April.
Governments and financial institutions worldwide have expressed alarm over the potential ramifications of Trump’s trade policy.
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), warned that the tariffs “clearly represent a significant risk to the global outlook at a time of sluggish growth.” She urged the US and its trading partners to engage in constructive dialogue to prevent further economic strain.
“We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” Georgieva said, noting that the IMF is still assessing the full macroeconomic impact of the tariffs.
In Japan, one of the US’s largest trading partners and foreign investors, the new tariffs have sparked a sense of urgency.
Prime Minister Shigeru Ishiba, addressing parliament, described the situation as a “national crisis,” revealing that his government is engaged in high-level discussions to mitigate the effects of the 24% tariffs imposed by the US.
From Beijing to Brussels, governments are preparing countermeasures, raising the prospect of a fresh wave of retaliatory tariffs, further escalating global trade tensions.
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