Donald Trump's tariff bomb triggers a historic $10 trillion market crash globally, which equals 50 percent of the EU’s total economy.
New York: President Donald Trump’s tariff policies — and unexpected U-turns — triggered a historic $10 trillion loss in global market value to date, with US tech giants like Apple and Amazon suffering massive drops.
The market crash is hitting economies worldwide, creating widespread instability. Experts warn that without actual trade negotiations in place, the volatility could persist, signaling a possible shift away from the global stability led by the US.
The financial consequences of tariff wars have caused shockwaves across international markets, with global market capitalization losing $10 trillion, the equivalent of over half of the entire GDP of the European Union, according to Bloomberg data.
For the first time in nearly a century, the S&P 500 recorded three consecutive 4 per cent declines, the biggest since the 1987 Black Monday crash, according to El Pais. The market destruction surpasses some of the biggest economic crises like the COVID-19 pandemic, the bankruptcy of Lehman Brothers, and the losses of 1998, as reported by El Pais.
Even though global markets were impacted after Trump announced tariffs worldwide, the US stock market has borne the biggest brunt, specifically for the tech giants referred to as the "Magnificent Seven”— Apple, Google, Nvidia, Meta, Amazon, Microsoft, and Tesla, according to the report.
These companies have together lost a total of $1.6 trillion in stock value since Thursday, reported El Pais. Apple has suffered the biggest blow, with losses of over half a trillion dollars, or about 16.8 per cent of its worth, as per the report.
As per multiple reports, Trump for the last few days has been facing pressure from Republicans and business executives following extensive sell-offs in the US stock market. They insisted he halt tariffs, given the fear of a major trade war. Investors said that tariffs announced can trigger a global market meltdown, and raised concerns of a looming global recession.
(Source: LSEG data)
The US President has announced a 90-day pause on ‘discounted’ reciprocal tariffs he announced on April 2 for all countries except China. Instead, Trump increased tariffs to 125 per cent on China, up from the previously declared 104 per cent, “effective immediately” due to the “lack of respect that China has shown to the World’s Markets.”
Trump said that over 75 countries had negotiated and not retaliated against the tariffs announced. During the pause, a significantly lower reciprocal tariff of just 10 per cent would be in effect.
A report in Axios, citing an official, claimed that the President and his advisers agreed that China's decision to impose retaliatory tariffs on the US gave them an opportunity to pause the tariff hikes on other countries as a token of friendship and isolate China.
Axios also reported that US economic advisers will now engage in a country-by-country negotiation process that will take months. However, Trump will make the final call on each deal.
Asian markets hit hard, US growth forecast cutNew York: Asian markets were hit particularly hard in the tariff tsunami, with markets in Japan and Taiwan hitting circuit breakers for the first time since March 2020. In Tokyo, the Nikkei 225 nosedived to its lowest level in over 18 months, with banks shedding almost a quarter of their market cap in just three sessions. India's Dalal Street fared no better, with the Sensex and Nifty crashing more than 5 per cent. Meanwhile, JP Morgan slashed its US GDP growth forecast, warning of a rise in unemployment. Billionaire Bill Ackman, who once backed Trump, said the administration is flirting with an "economic nuclear winter." With the US administration’s trade policies being unpredictable, often changing within hours and leaving economists and investors scrambling, Goldman Sachs has pulled back its recession forecast for the US economy. This is after President Donald Trump announced a 90-day pause on most of the new tariffs he had previously rolled out on April 2. However, the investment bank still expects the US economy to slow sharply this year due to ongoing policy uncertainty. |
