US stock markets regained some strength while Asian and European markets fell sharply after former President Donald Trump hinted at sweeping import duties. His remarks have increased fears of an escalating global trade conflict.
During recent public comments, Trump referred to Wednesday—the day he plans to announce new tariffs—as America’s “Liberation Day.” The proposed tariffs follow earlier duties on cars, steel, aluminum, and all products imported from China. Trump’s increasingly aggressive trade stance has left investors and policymakers worried about further economic instability.
Uncertainty Over Tariffs Shakes Markets
Trump’s mixed signals on trade policy have led to sharp market swings in the past month. Last week, he suggested there might be exceptions for some countries. However, just days later, he indicated that tariffs could apply to all nations. Speaking aboard Air Force One on Sunday, he stated, “You’d begin with all countries… essentially everyone under consideration.”
The uncertainty surrounding these policies has unsettled financial markets. Since mid-February, the S&P 500 has dropped nearly 10%, marking its worst month in years. The Nasdaq index has fallen more than 10%, making this its weakest quarter since 2022. Although US stocks opened lower on Monday, they later rebounded. The Dow Jones Industrial Average closed up 1%, the S&P 500 rose 0.5%, while the Nasdaq slipped by 0.1%.
The negative sentiment was more pronounced in Asia, where Japan’s Nikkei 225 fell by 4%, and South Korea’s Kospi declined by 3% on Monday. European markets also suffered losses, with the UK’s FTSE 100 index dropping 0.9%, Germany’s Dax falling 1.3%, and France’s Cac 40 decreasing by 1.6%.
Global Responses and Retaliatory Measures
The UK and its allies have started preparing their responses as trade tensions escalate. British officials warned that they expect to be affected by the tariffs and have not ruled out retaliatory measures. A government spokesperson described recent talks with Washington as “constructive,” though significant progress appears unlikely before the Wednesday announcement.
Meanwhile, Canada and the European Union have announced their intention to introduce countermeasures if the US enforces these tariffs. Many economists fear that an ongoing trade war could push the US into a recession, further dampening global growth.
As market fears rise, investors have turned to gold as a safe-haven asset. Gold prices have surged to a new record high of $3,128.06 per ounce, reflecting the uncertainty surrounding global trade policies.
Economic Experts Warn of Risks to Key Industries
Financial analysts warn that major industries could suffer if new tariffs take effect. Shanti Kelemen, an investment expert at M&G Wealth, highlighted Japan’s dependence on exports, particularly in vehicles and semiconductors. She noted that these industries might be affected next, despite having avoided duties so far.
Trump argues that imposing tariffs will protect US industries, generate revenue, and force better trade agreements. A recent White House report suggested that a 10% import tariff could create nearly three million US jobs. Trade advisor Peter Navarro stated that all proposed tariffs could generate up to $600 billion per year—equivalent to 20% of the total annual US import value.
However, many businesses warn that these tariffs will lead to increased costs, which will either be passed on to consumers through higher prices or result in lower profit margins for companies. Rising consumer prices could also worsen inflation—an issue Trump has vowed to fight if re-elected.
Business Leaders Express Concerns Over Tariff Impact
Some business leaders are already reviewing their US operations in response to the uncertainty. Will Butler-Adams, CEO of Brompton Bicycle, expressed concerns about the future of his company’s sales in the US. Currently, his folding bikes are not subject to tariffs, but new policies could change that.
“We won’t keep investing as before,” he said. “We could shrink or even leave the US entirely.” He also pointed to the confusion surrounding existing tariffs, particularly the difficulty in tracking the origin of imported steel. “We don’t fully understand them,” he admitted, “and even US border agents don’t always have clear guidance.”
TikTok Faces Potential US Ban as Deadline Approaches
In a separate development, Trump confirmed that Chinese-owned social media app TikTok is facing a looming deadline to find a US buyer. ByteDance, the parent company of TikTok, has until April 5 to secure a non-Chinese buyer or risk being banned in the US. This regulation was originally passed under President Joe Biden and was expected to take effect earlier this year.
With the trade war concerns and looming restrictions on foreign technology companies, global economic tensions remain high. Investors and businesses alike are bracing for further turbulence as trade policies shift in unpredictable ways.