Stock markets across the globe plunged into turmoil on Monday as investors braced for U.S. President Donald Trump’s latest round of tariffs, set to take effect on what he calls “Liberation Day” this Wednesday. The aggressive trade measures, which include a crippling 25% tariff on all vehicle and auto parts imports, have ignited recession fears, sending shockwaves through the financial world.
Tokyo led the bloodbath, with Japan’s Nikkei 225 nosediving over 4%, putting it into correction territory as industry giants Toyota, Nissan, and Mazda suffered heavy losses. The fallout was equally brutal in South Korea, where the auto sector and broader markets tumbled, reflecting deep concerns over the tariffs’ economic impact.
Economists at Moody’s Analytics warned that Trump’s actions could slash 0.2 to 0.5 percentage points off Japan and South Korea’s GDP, further fueling instability. Meanwhile, global governments have lashed out against the U.S. move, with Canada’s Prime Minister Mark Carney vowing retaliation to protect his country’s economy from what critics describe as reckless economic warfare.
Adding to the market anxiety, new data showed U.S. inflation rising faster than expected, fanning fears that the Federal Reserve may be forced to reconsider interest rate cuts. Investors fled to safe havens, pushing gold to a record-breaking $3,127.92 per ounce.
The selloff was felt worldwide, with steep losses in Hong Kong, Shanghai, Sydney, and Bangkok, where trading resumed after Friday’s deadly earthquake. Meanwhile, European markets opened sharply lower, following Wall Street’s dramatic Friday losses, where the Dow, S&P 500, and Nasdaq suffered significant declines.
In a twist of geopolitical tension, reports surfaced that Chinese regulators are delaying a high-profile multi-billion-dollar deal involving Hong Kong’s CK Hutchison and U.S.-led investors, further intensifying the standoff between Washington and Beijing.
As the world braces for Trump’s next economic offensive, analysts warn that the fallout could spiral into a full-blown global financial crisis. Whether this is a strategic gamble or a reckless miscalculation remains to be seen, but one thing is certain—the global economy is on edge.
