The recent plunge of the German stock index (DAX) is part of a global financial phenomenon triggered by the aggressive tariff policy of the USA. This came to the forefront on April 2, 2025, when President Donald Trump announced the so-called “Liberation Day” tariffs to boost the US economy and reduce the trade deficit.
Impact on the DAX
The reaction to the new tariffs was devastating on the German stock market. On Monday, April 7, 2025, the DAX lost up to 10% of its value, completely erasing the gains made earlier in the year. The low was reached at around 18,489.91 points.
Global Reactions
The negative effects quickly impacted global markets. The Dow Jones fell by over 4,000 points within just 48 hours, an unprecedented drop. In Asia, indexes also plummeted sharply, in some cases even double-digit declines. China, in particular, showed its teeth and announced its own counter-tariffs.
Economic Concerns
The tariff policy has raised serious concerns about the onset of a global recession and rising inflation. Jerome Powell, the head of the US Federal Reserve, expressed concerns about the potential effects on consumer prices and the economy. The EU is also planning strategic countermeasures.
Future Prospects
The coming weeks will be marked by high uncertainty. The US government remains unyielding while markets remain volatile. Fears of a global economic downturn are growing as the world waits for possible negotiations and compromises.