Asian Stock Markets Suffer Major Losses: How Trump’s Tariffs Sparked the Crisis?

Asian stock markets, including Shanghai, Tokyo, Sydney, and Hong Kong, faced significant declines on Monday, hitting their lowest levels in decades due to the global impact of US President Donald Trump’s tariffs.

The Shanghai Composite dropped over 8%, Hong Kong’s Hang Seng fell more than 13%, and Japan’s Nikkei 225 closed 7.8% lower. European markets also saw sharp declines, with banks and defense companies experiencing the biggest drops.

The Trump tariffs have severely affected Asia’s manufacturing sectors, which are highly dependent on US exports. Japan and South Korea are subject to a 26% tariff, while developing countries like Vietnam expect a 46% charge. Tariffs for some countries, including Cambodia, Thailand, and China, range from 36% to 54%. Singapore and New Zealand already have a 10% tariff slapped on them.

The worry now is over a possible global trade war which will slow down or even bring recession to the USA, the world’s largest economy, and leave Asian exports further reeling. The markets of China, Hong Kong, and Taiwan were thrown into further turmoil with the results from Friday’s trading, where losses recorded were staggering. Shanghai Composite fell 7.3%, and Taiwan’s index lost 9.7% – the biggest drop on record.

Due to inflation and recessionary fears, Goldman Sachs now expects a 45% chance for a US recession in the next 12 months, raised from an earlier 35% estimate. Countries like Vietnam and Bangladesh relying on exports from the US are also suffering due to increased tariffs.

China, the largest Asian economy, has retaliated with its own tariffs, making things worse in the global markets. The US stock market notched its worst week since 2020, with sharp losses across UK, Germany, and French markets. The decline of the global stock markets is expected to persist.

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