Global Stock Markets Brace for Significant Decline Amid U.S. Trade Policy Rigidity
Intensified trade tensions and new U.S. tariffs lead to plummeting stock indices across Asia and Europe.
European stock markets are poised to open sharply lower as trade tensions escalate between the United States and its global partners, highlighting the potential for an economic slowdown.
John Plassard, an investment specialist at Mirabaud, commented that "European indices are expected to open significantly down on Monday, following the intensifying trade tensions which are increasingly signaling a global economic deceleration."
Futures contracts for Germany's DAX index fell by 4.40%, reflecting trading activity ahead of the European market opening, scheduled for 07:00 GMT.
Meanwhile, futures for Paris' CAC 40 declined by 2.58%, London's FTSE 100 slid by 2.43%, and Milan’s exchange saw a drop of 5.30%.
The previous week had already witnessed the largest weekly decline in U.S. markets since March 2020, further exacerbating concerns.
Asian markets mirrored this downward trend, with Hong Kong’s stock exchange plummeting by over 12%, marking a record decline not seen in over 16 years.
The Shanghai Composite Index dropped by 8.40%, and Shenzhen's index fell by 10.33% around 06:30 GMT.
In Tokyo, the Nikkei 225 index lost 7.01% around the same time.
The severity of these declines was compounded by China's retaliatory tariffs announced on Friday, even as many Asian markets had already closed for the weekend.
President Donald Trump had initiated rigorous new tariffs targeting Asia and the European Union in a return to aggressive trade policies reminiscent of the 1930s, implementing an additional baseline tariff of 10% on all imported products to the U.S., alongside higher increases for specific countries: 20% for the European Union, 34% for China, 24% for Japan, and 31% for Switzerland.
Trump’s administration has characterized these tariffs as victories rather than negotiation tools, while Stephen Innes, an analyst at SPI AM, remarked that "the Trump team remains steadfast, viewing tariffs as wins rather than bargaining chips."
In light of the market panic, Trump defended the aggressive stance against trade partners, suggesting that "sometimes you need to take a treatment to heal," asserting that the country has grown "much stronger" since his administration's announcement of these measures.
The president has accused economic partners of "pillaging" the U.S. economy, prompting the implementation of a universal tariff which took effect on Saturday and will be increased for several major trading partners starting Wednesday.
In response to the new tariffs, China swiftly announced its own measures, targeting 34% tariffs on U.S. imports, emphasizing that these actions aim to bring the U.S. back "onto the right track," as stated by Ling Ji, China's Vice Minister of Commerce.
Notably, China has committed to remaining a "safe haven" for foreign investments, even while facing intense economic pressures.
Meanwhile, over the weekend, numerous countries moved to engage with the U.S. to negotiate relief from these tariffs.
Trump indicated that he had spoken to numerous leaders from Europe and Asia, conveying a desire for trade agreements.
U.S. Treasury Secretary Scott Bessent mentioned that more than 50 countries had approached the government regarding tariff negotiations and currency manipulation cessation, stating that it remains to be seen whether these proposals are credible.
In Europe, expectations of a substantial response were echoed.
Stéphane Séjourné, Executive Vice President of the European Commission, confirmed that a European counteraction is being prepared, which will likely include a proportional response to the U.S. tariffs.
The aim will be to create unity within the EU while addressing the anticipated impacts on the European economy.
As the economic turmoil unfolds, stock markets await the first signs of responses from Europe and developments regarding potential negotiations and further tariff adjustments, with analysts closely monitoring the situation as it evolves.
John Plassard, an investment specialist at Mirabaud, commented that "European indices are expected to open significantly down on Monday, following the intensifying trade tensions which are increasingly signaling a global economic deceleration."
Futures contracts for Germany's DAX index fell by 4.40%, reflecting trading activity ahead of the European market opening, scheduled for 07:00 GMT.
Meanwhile, futures for Paris' CAC 40 declined by 2.58%, London's FTSE 100 slid by 2.43%, and Milan’s exchange saw a drop of 5.30%.
The previous week had already witnessed the largest weekly decline in U.S. markets since March 2020, further exacerbating concerns.
Asian markets mirrored this downward trend, with Hong Kong’s stock exchange plummeting by over 12%, marking a record decline not seen in over 16 years.
The Shanghai Composite Index dropped by 8.40%, and Shenzhen's index fell by 10.33% around 06:30 GMT.
In Tokyo, the Nikkei 225 index lost 7.01% around the same time.
The severity of these declines was compounded by China's retaliatory tariffs announced on Friday, even as many Asian markets had already closed for the weekend.
President Donald Trump had initiated rigorous new tariffs targeting Asia and the European Union in a return to aggressive trade policies reminiscent of the 1930s, implementing an additional baseline tariff of 10% on all imported products to the U.S., alongside higher increases for specific countries: 20% for the European Union, 34% for China, 24% for Japan, and 31% for Switzerland.
Trump’s administration has characterized these tariffs as victories rather than negotiation tools, while Stephen Innes, an analyst at SPI AM, remarked that "the Trump team remains steadfast, viewing tariffs as wins rather than bargaining chips."
In light of the market panic, Trump defended the aggressive stance against trade partners, suggesting that "sometimes you need to take a treatment to heal," asserting that the country has grown "much stronger" since his administration's announcement of these measures.
The president has accused economic partners of "pillaging" the U.S. economy, prompting the implementation of a universal tariff which took effect on Saturday and will be increased for several major trading partners starting Wednesday.
In response to the new tariffs, China swiftly announced its own measures, targeting 34% tariffs on U.S. imports, emphasizing that these actions aim to bring the U.S. back "onto the right track," as stated by Ling Ji, China's Vice Minister of Commerce.
Notably, China has committed to remaining a "safe haven" for foreign investments, even while facing intense economic pressures.
Meanwhile, over the weekend, numerous countries moved to engage with the U.S. to negotiate relief from these tariffs.
Trump indicated that he had spoken to numerous leaders from Europe and Asia, conveying a desire for trade agreements.
U.S. Treasury Secretary Scott Bessent mentioned that more than 50 countries had approached the government regarding tariff negotiations and currency manipulation cessation, stating that it remains to be seen whether these proposals are credible.
In Europe, expectations of a substantial response were echoed.
Stéphane Séjourné, Executive Vice President of the European Commission, confirmed that a European counteraction is being prepared, which will likely include a proportional response to the U.S. tariffs.
The aim will be to create unity within the EU while addressing the anticipated impacts on the European economy.
As the economic turmoil unfolds, stock markets await the first signs of responses from Europe and developments regarding potential negotiations and further tariff adjustments, with analysts closely monitoring the situation as it evolves.
