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Asian Stock Markets Plunge Amid New U.S. Tariffs
Global investors were caught off guard Monday morning as stock markets across Asia experienced heavy losses. The financial turmoil was triggered by a sharp escalation in trade tensions between the U.S. and China, following a surprise move by President Trump to impose new tariffs.
Markets in Tokyo and Seoul led the decline, with Japan’s benchmark index falling over 8% and South Korea’s down nearly 5%. Analysts warn these countries are especially vulnerable since they rely on both the U.S. and China for trade.
“This region sits at the center of global supply chains, so any disruption between the U.S. and China hits hard,” said a Tokyo-based economist.
U.S. Market Futures and Commodities Slide
The pain extended beyond Asia. Futures tied to the S&P 500 dropped 4% Sunday night, suggesting more trouble ahead for U.S. investors when Wall Street opens. Meanwhile:
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Oil prices fell more than 3%
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Copper, a global economic indicator, dropped over 5%
This comes on the heels of the S&P 500 losing 10.5% in just two days last week — its worst two-day performance since March 2020.
Tariffs Spark Fears of Self-Inflicted Recession
President Trump’s surprise announcement last Wednesday included a 34% tariff on Chinese imports. China responded over the weekend with an identical tariff on U.S. goods, raising fears of a prolonged trade war.
“If these tariffs remain, we could be heading toward a self-inflicted economic crisis,” said Preston Caldwell, senior economist at Morningstar.
Major companies have already started responding:
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Automakers are pausing production overseas
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Some firms are cutting jobs at home
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Consumer brands are warning of price hikes on groceries, clothing, and electronics
As a result, American consumers are pulling back on large purchases, and economists say the risk of a U.S. recession is climbing.
Investors Urge Trump to Hit “Pause”
Billionaire hedge fund manager Bill Ackman called on Trump to impose a “90-day timeout” on further tariff action. Without it, he warned, the U.S. could face an “economic nuclear winter.”
World Leaders Weigh In
Even British Prime Minister Keir Starmer urged caution, saying, “The world as we knew it has gone,” and warning that a full-blown trade war would be dangerous for all sides.
Markets Near Bear Territory
The damage is spreading across all major U.S. indices:
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S&P 500 is down 17.4% from its February peak
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Nasdaq Composite is in a bear market, down nearly 23% from December
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Russell 2000 has fallen over 25% since November
Despite this, Treasury Secretary Scott Bessent insists the U.S. is not heading into a recession.
Experts: “This May Get Worse Before It Gets Better”
While some remain hopeful that tax cuts and deregulation could soften the blow, others are warning that more market declines may be coming.
“We’re staying very cautious,” said Stuart Kaiser from Citi. “Earnings and economic forecasts are still way too optimistic.”
What Happens Next?
With no signs of either side backing down, investors are bracing for continued volatility. The world economy is now on edge, watching closely for the next move in this escalating trade showdown.
