Market panic deepens as China retaliates vs tariffs
‘The market’s telling you in plain language: global demand is vanishing, and a global recession is on the cards and coming on fast’
World markets crashed on Monday with Asia leading the rout, as US President Donald Trump held firm on his swingeing tariffs despite China retaliating and global recession warnings growing louder.
AFP
World markets crashed on Monday with Asia leading the rout, as United States President Donald Trump held firm on his swingeing tariffs despite China retaliating and global recession warnings growing louder.
Hong Kong’s Hang Seng plunged more than 13 percent, its biggest drop since the 1997 Asian financial crisis, while in Japan the Nikkei 225 index fell an eye-watering 7.8 percent.
Countries mostly have been scrambling to blunt the new US tariffs without retaliating, but Beijing is responding in kind, escalating the trade war between the two biggest economies.
Beijing’s new 34-percent tariffs announced on Friday “are aimed at bringing the United States back onto the right track of the multilateral trade system,” said vice commerce minister Ling Ji.
“The root cause of the tariff issue lies in the United States,” Ling told representatives of US companies on Sunday, according to his ministry.
Trump on Sunday doubled down on his demand to slash deficits with trading partners, saying he would not cut any deals unless that was resolved.
“Sometimes you have to take medicine to fix something,” Trump said on Sunday.
He told reporters aboard Air Force One that world leaders are “dying to make a deal.”
Trillions of dollars have been wiped off stocks worldwide, and on Monday Asian equities took an even heavier hammering as investors moved to safer assets.
In Europe, Frankfurt’s DAX sank a massive 10 percent with Paris diving more than six percent and London sliding nearly six percent.
US oil dropped below $60 a barrel for the first time since April 2021 on worries of a global recession.
“(This) is blunt-force economic warfare,” said Stephen Innes at SPI Asset Management.
“The market’s telling you in plain language: global demand is vanishing, and a global recession is on the cards and coming on fast,” Innes said.
Meantime, Britain’s Prime Minister Keir Starmer warned in a newspaper op-ed that “the world as we knew it has gone,” saying the status quo would increasingly hinge on “deals and alliances.”
Trump’s staggered deadlines have left space for some countries to negotiate, even as he insisted he would stand firm and his administration warned against any retaliation.