Global markets plunged Thursday following former U.S. President Donald Trump's announcement of sweeping tariff increases, igniting fresh fears of a prolonged trade war and economic downturn. The measures targeted major economies, with China facing a 34% tariff hike and the EU hit with a 20% levy, sending shockwaves through Asia's export-dependent economies.
Asian stocks led losses: Japan's Nikkei 225 slid 2.8%, while South Korea's Kospi dropped 1.1% after facing a 25% tariff. Tokyo's Mitsubishi UFJ Financial Group plummeted 7.2% as traders feared the impact on Japan's export-driven economy. The yen strengthened sharply to 147.42 against the dollar, complicating central bank efforts to manage inflation.
Analysts called the measures a 'direct hit' to supply chains. 'China's total tariff burden now stands at 64% when accounting for previous measures,' said IG Singapore's Yeap Jun Rong. Beijing is expected to counter with economic stimulus measures to cushion impacts.
European markets mirrored the turmoil, with Germany's DAX down 1.7% and Britain's FTSE 100 slipping 1.2%. U.S. futures signaled major opening losses, with S&P 500 futures sinking 3.1%.
Thailand's SET index fell 1.1% following a 36% tariff announcement that could slash $7-8 billion from exports, while oil prices tumbled amid demand concerns. Bond markets reflected economic uncertainty as 10-year Treasury yields swung between 4.11% and 4.18%.
