Asian stock exchanges are experiencing significant declines as the repercussions of US President Donald Trump’s tariffs continue to ripple globally.
Key indexes from Shanghai to Tokyo, as well as Sydney and Hong Kong, showed steep drops when trading commenced on Monday. “It’s a bloodbath,” remarked one analyst to the BBC.
As a region that produces a considerable portion of the goods traded globally, Asian nations are feeling the direct effects of the tariffs.
They are also acutely aware of the potential consequences of a global trade conflict leading to a slowdown or even a recession in the world’s largest economy.
By midday, Japan’s Nikkei 225 index had fallen by 6%, the ASX 200 in Australia was down by 4%, and South Korea’s Kospi dropped by 4.7%.
Declines in mainland China, Hong Kong, and Taiwan were intensified as investors responded to the significant losses observed in other markets on Friday, as they were closed for public holidays.
The Shanghai Composite fell more than 6%, while the Hang Seng and Taiwan Weighted Index saw declines of approximately 10%.
“Tariffs are influencing expectations regarding inflation and the possibility of a recession,” stated Julia Lee, Head of FTSE Russell, a subsidiary of the London Stock Exchange Group.
Goldman Sachs has increased its forecast for a US recession within the next year to 45%, up from 35%, as the investment bank revised its economic growth outlook for the nation.
Other Wall Street institutions have also adjusted their recession predictions following Trump’s tariff announcement, with JPMorgan now estimating a 60% chance of a recession affecting both the US and the global economy.
A notable downturn in the US economy would significantly impact Asian exports, given that the US serves as a crucial market for products from the region.
“Asia is taking the brunt of the US tariff increase. While there might be some negotiation space, the new landscape of elevated tariffs is likely to remain,” said Qian Wang, Chief Economist for Asia Pacific at Vanguard.
“This situation is detrimental to both the global and Asian economies, particularly affecting smaller open economies in both the short and long term.”
On Friday, the global stock market turmoil intensified after China retaliated against Trump’s tariffs.
All three major US stock indexes fell by more than 5%, with the S&P 500 experiencing a nearly 6% drop, marking the worst week for the US stock market since 2020.
In the UK, the FTSE 100 dropped nearly 5%—its largest decline in five years—while exchanges in Germany and France faced similar downturns.
Ms. Lee also pointed out that the global stock market decline is likely to persist: “US futures indicating lower suggest another challenging session on Wall Street tonight.”
Since Trump announced sweeping new 10% import tariffs on goods from all countries, global stock markets have lost trillions in value, with products from numerous countries—such as key trading partners including China, the European Union, and Vietnam—facing significantly higher rates.
