Impact on the Stock Markets
- US Markets: The announcement led to a significant plunge in US markets. The Dow Jones lost over 3.98% and fell to its lowest level since September 2024. The S&P 500 dropped by 4.84%, while the Nasdaq plummeted by 5.4%.
- European Markets: Germany’s leading index DAX plunged by up to 10%, marking the largest daily loss in a long time.
- Asian Markets: The Nikkei index in Tokyo fell by 6.5%, while the Shanghai Composite Index plummeted by 5.4%.
Economic Impacts
- Trade War: The tariff announcement has heightened fears of a global trade war. This could lead to a deterioration of trade relations between the US and other countries.
- Economic Uncertainty: The measures have created significant political uncertainty, which could reduce economic growth in the Eurozone by 0.5 to 1%.
- Counter-tariffs: The EU is preparing for possible counter-tariffs in response to US actions.
Reactions and Predictions
- Trump’s Position: Trump remains firm in his tariff policy and expects massive payments from foreign governments in exchange for lifting the tariffs.
- Market Predictions: Experts anticipate ongoing turbulence in the markets, as tariffs and potential counter-tariffs could mark the end of the bull market.
- Long-term Effects: The measures could damage the US’s reputation as a trading partner and hinder investments in the long run.
Overall, Trump’s tariff announcement has led to a global stock market crisis and poses the risk of a comprehensive trade war that could heavily burden the world economy.