Global Financial Markets Shake in Response to U.S. Tariff Increases Announced by Trump
Following Donald Trump’s announcement of significant tariff increases, financial markets experience severe downturns, prompting investors to seek safe havens.
On April 3, 2025, global financial markets reacted sharply to U.S. President Donald Trump's announcement of substantial tariff increases, leading to widespread declines across major indices.
At the opening of Wall Street, the S&P 500 fell by 3.28%, the Nasdaq experienced a decline of 4.59%, and the Dow Jones dropped 3.59% by 13:40 GMT.
In Europe, stock markets mirrored this downturn, with the Paris Bourse falling significantly by 2.92%, Frankfurt 2.12%, Milan 2.73%, and London 1.30%.
President Trump’s tariff strategy, described as one of the most aggressive since the 1930s, included a baseline tariff hike of 10% on all imports, with higher rates imposed on certain countries: 20% on European Union products, 34% on Chinese goods, 24% on Japanese imports, and 31% on Swiss products.
This unprecedented move raised concerns over potential retaliatory measures that could stifle global economic growth.
As a direct consequence of these developments, the U.S. dollar depreciated by 2.36%, settling at 1.1089 dollars per euro.
Concurrently, crude oil prices plummeted by approximately 7% across both European and U.S. markets, driven by investor expectations of diminished global growth and subsequent reductions in oil demand.
In the midst of this market turmoil, safe-haven assets saw increased demand.
The price of gold surged to $3,067 per ounce, and the Swiss franc gained 2.66%, reaching 1.1639 dollars at 13:40 GMT.
Additionally, the bond market benefited from the uncertainty, with yields on U.S. Treasury bonds dropping to 4.03%, down from 4.13% the previous day, while German bunds decreased from 2.72% to 2.64%.
Market sectors closely associated with trade, such as suppliers to sporting equipment manufacturers, saw significant impacts.
The Vietnamese stock market index dropped by 6.68%, primarily driven by declines in shares of sporting goods suppliers worldwide.
In the U.S., Nike’s stock fell nearly 10%, translating to a loss of approximately $9 billion in market capitalization, while Lululemon experienced a decline of 12.36%.
European firms like Adidas and Puma also reported losses of up to 12.35%.
The technology sector, usually a robust performer, was similarly affected.
Apple shares fell by 8.5%, equating to a market cap decline of $255 billion.
Other tech giants also reported losses, with Nvidia down 5.24%, Microsoft by 3.01%, Tesla at 3.47%, Amazon 6.76%, Meta 7.13%, and Alphabet 3.32%.
U.K. banks, particularly exposed to Southeast Asia, faced sharp declines as fears of economic deterioration in China mounted.
Standard Chartered shares dropped by 10.89%, Barclays by 8.34%, and HSBC by 7.76%.
This uncertainty also impacted the global shipping industry, as the Freightos Baltic Index, a measure of shipping costs, hit its lowest level since January 2024, with companies like Hapag-Lloyd and A.P. Moller-Maersk reporting drops in share prices exceeding 8%.
The impact extended to the wine and spirits industry, notably in France, where the absence of specific tariffs on these products was met with cautious relief.
Nonetheless, the U.S. will impose a 20% tariff on the general category of imported wines and spirits, echoing previous tariffs that had adversely affected French exports, costing the industry over 600 million euros in 2019. Producers expressed concern over the broader implications of these tariff increases.
In response to these developments, President Macron of France convened a meeting at the Élysée with representatives from the affected sectors to address the implications of the announced tariffs.
Macron emphasized the need for a coordinated European response to safeguard French and EU interests amidst the escalating trade tensions.
Globally, reactions varied with calls for retaliation from numerous countries.
In Asia, South Korea’s interim president pledged to utilize government resources to combat the trade crisis, while Chinese authorities demanded the immediate cancellation of the new tariffs, suggesting that they would implement countermeasures to protect their interests.
European leaders expressed their commitment to a unified response, with Italy’s Prime Minister emphasizing the need to reach an agreement with the U.S. to avoid a damaging trade war.
The German Vice Chancellor pointed to the potential for Germany to respond strongly to the tariffs, while other European officials called for a coordinated, proportional response to the U.S. measures to mitigate the economic impact across the continent.
At the opening of Wall Street, the S&P 500 fell by 3.28%, the Nasdaq experienced a decline of 4.59%, and the Dow Jones dropped 3.59% by 13:40 GMT.
In Europe, stock markets mirrored this downturn, with the Paris Bourse falling significantly by 2.92%, Frankfurt 2.12%, Milan 2.73%, and London 1.30%.
President Trump’s tariff strategy, described as one of the most aggressive since the 1930s, included a baseline tariff hike of 10% on all imports, with higher rates imposed on certain countries: 20% on European Union products, 34% on Chinese goods, 24% on Japanese imports, and 31% on Swiss products.
This unprecedented move raised concerns over potential retaliatory measures that could stifle global economic growth.
As a direct consequence of these developments, the U.S. dollar depreciated by 2.36%, settling at 1.1089 dollars per euro.
Concurrently, crude oil prices plummeted by approximately 7% across both European and U.S. markets, driven by investor expectations of diminished global growth and subsequent reductions in oil demand.
In the midst of this market turmoil, safe-haven assets saw increased demand.
The price of gold surged to $3,067 per ounce, and the Swiss franc gained 2.66%, reaching 1.1639 dollars at 13:40 GMT.
Additionally, the bond market benefited from the uncertainty, with yields on U.S. Treasury bonds dropping to 4.03%, down from 4.13% the previous day, while German bunds decreased from 2.72% to 2.64%.
Market sectors closely associated with trade, such as suppliers to sporting equipment manufacturers, saw significant impacts.
The Vietnamese stock market index dropped by 6.68%, primarily driven by declines in shares of sporting goods suppliers worldwide.
In the U.S., Nike’s stock fell nearly 10%, translating to a loss of approximately $9 billion in market capitalization, while Lululemon experienced a decline of 12.36%.
European firms like Adidas and Puma also reported losses of up to 12.35%.
The technology sector, usually a robust performer, was similarly affected.
Apple shares fell by 8.5%, equating to a market cap decline of $255 billion.
Other tech giants also reported losses, with Nvidia down 5.24%, Microsoft by 3.01%, Tesla at 3.47%, Amazon 6.76%, Meta 7.13%, and Alphabet 3.32%.
U.K. banks, particularly exposed to Southeast Asia, faced sharp declines as fears of economic deterioration in China mounted.
Standard Chartered shares dropped by 10.89%, Barclays by 8.34%, and HSBC by 7.76%.
This uncertainty also impacted the global shipping industry, as the Freightos Baltic Index, a measure of shipping costs, hit its lowest level since January 2024, with companies like Hapag-Lloyd and A.P. Moller-Maersk reporting drops in share prices exceeding 8%.
The impact extended to the wine and spirits industry, notably in France, where the absence of specific tariffs on these products was met with cautious relief.
Nonetheless, the U.S. will impose a 20% tariff on the general category of imported wines and spirits, echoing previous tariffs that had adversely affected French exports, costing the industry over 600 million euros in 2019. Producers expressed concern over the broader implications of these tariff increases.
In response to these developments, President Macron of France convened a meeting at the Élysée with representatives from the affected sectors to address the implications of the announced tariffs.
Macron emphasized the need for a coordinated European response to safeguard French and EU interests amidst the escalating trade tensions.
Globally, reactions varied with calls for retaliation from numerous countries.
In Asia, South Korea’s interim president pledged to utilize government resources to combat the trade crisis, while Chinese authorities demanded the immediate cancellation of the new tariffs, suggesting that they would implement countermeasures to protect their interests.
European leaders expressed their commitment to a unified response, with Italy’s Prime Minister emphasizing the need to reach an agreement with the U.S. to avoid a damaging trade war.
The German Vice Chancellor pointed to the potential for Germany to respond strongly to the tariffs, while other European officials called for a coordinated, proportional response to the U.S. measures to mitigate the economic impact across the continent.
