World reels as White House unveils sweeping economic offensive
FINANCIAL markets across the globe plunged into chaos on Monday as the full impact of US President Donald Trump’s sweeping new tariffs hit home. With a 10% “baseline” tariff on imports now in force, and steeper tariffs for selected countries set to follow on Wednesday (Apr 9), investors have responded with a brutal sell-off—sparking fears of a global recession.
The move has already prompted retaliatory action from China, a collapse in major stock indices across Asia and Europe, and warnings from business leaders and economists that the world could be facing its most severe self-inflicted economic shock in decades.
‘A bloodbath’ across global markets
In Hong Kong, the Hang Seng index dropped 13.22%, its worst single-day fall in nearly three decades. Taiwan’s TAIEX plunged 9.7%, its steepest decline on record. Japan’s Nikkei fell more than 8%, while the FTSE 100 in London opened down almost 6%, briefly touching lows not seen since the height of the Covid-19 crisis. In Frankfurt, Germany’s DAX fell 10% at the open before recovering slightly.
European markets steadied somewhat by midday but remained deep in the red. In the US, futures trading pointed to a sharp fall for the S&P 500 and Nasdaq, continuing Friday’s plunge where all three major US indexes shed over 5%.
Investor Russ Mould of AJ Bell described the situation as “two horrible days lumped into one” for Asia. Economists say it reflects rising panic that Trump’s tariffs are not a temporary negotiation tactic but a lasting reset in global trade rules.
Trump remains defiant
Speaking to reporters aboard Air Force One on Sunday night, President Trump insisted the tariffs were necessary medicine for the American economy.
“Sometimes you have to take medicine to fix something,” he said. “We’re going to become a wealthy nation again, wealthy like never before.”
He dismissed the market chaos, saying: “What’s going to happen to the markets, I can’t tell you. But our country is much stronger.”
On social media, he declared tariffs “a beautiful thing to behold”, claiming they were already bringing in “tens of billions of dollars” to US coffers.
But critics – including prominent Trump ally and hedge fund manager Bill Ackman – warned the president risks sparking an “economic nuclear winter.” Ackman urged a 90-day pause to allow negotiations.
Retaliation and panic abroad
China was quick to respond, imposing a 34% tariff on all US goods from Thursday (Apr 10), calling the US move “unjustified economic aggression.”
Elsewhere, the fallout was immediate:
- Jaguar Land Rover announced it was halting all US shipments.
- Japan’s government pledged emergency support for carmakers and banks, with shares in Honda and Nissan down 10%.
- Taiwan said it would not retaliate, but pledged T$88 billion (£2.1bn) in business support.
- Vietnam requested a 45-day delay after being hit with a massive 46% levy.
- Germany’s incoming Chancellor Friedrich Merz warned that Europe faced an “urgent” challenge to stay competitive amid what he called a “dramatic” global economic threat.
European Commission President Ursula von der Leyen said the EU would be “ready to impose proportionate counter-measures” if talks with the US failed.
UK Prime Minister Keir Starmer struck a more cautious tone, saying the UK would not retaliate immediately but would “shelter British business from the storm” through industrial policy.
Dollar dips, crypto crashes
The US dollar, often seen as a safe haven in turbulent times, dropped sharply. It hit a six-month low against the Swiss franc and fell 2.8% against the Japanese yen over the past week. Safe-haven currencies surged as investors fled risk.
Bitcoin, Ethereum, and other cryptocurrencies were not spared. Bitcoin fell below $77,000, shedding over 7% in one day, while Ethereum plunged nearly 18%.
Laith Khalaf of AJ Bell said, “Crypto has risk in spades – and right now, markets are punishing anything that looks risky.”
Commodities and oil prices tumble
Brent Crude dropped to $63.49 a barrel—its lowest level since April 2021—while copper fell sharply on fears of a slowdown in global industrial demand.
This, experts say, reflects a growing assumption that the US and other major economies may enter recession.
Goldman Sachs raised the risk of a US recession in the next 12 months to 45%, with JP Morgan putting it even higher, at 60%.
‘Globalisation has ended’
Speaking on BBC’s Sunday with Laura Kuenssberg, UK Treasury minister Darren Jones declared that “globalisation, as we’ve known it for decades, has come to an end.” Business leaders echoed those concerns.
INEOS Automotive boss Lynn Calder warned, “Everyone is going to hurt from this.” UK-based exporters such as Fracino Coffee Machines said cheap, redirected products from Asia could flood the UK market, damaging domestic firms.
Allies and adversaries respond
With over 50 countries reaching out to Washington seeking talks, it remains unclear whether Trump intends to budge.
Israeli Prime Minister Benjamin Netanyahu is flying to Washington for talks—the first foreign leader to meet Trump since the tariff storm began.
Meanwhile, Indonesia, India, and Taiwan have signalled they will not impose retaliatory tariffs, seeking instead to protect their export routes and negotiate.
Uncertain days ahead
Despite White House claims that “the markets are adjusting,” analysts warn the full impact has yet to be seen.
As the world watches the countdown to April 9—when the steepest tariffs kick in—investors, businesses, and governments alike are preparing for what could become a prolonged period of volatility and economic upheaval.
“The assumptions about Trump’s trade tactics are out the window,” said BBC economics editor Faisal Islam. “This isn’t about negotiation anymore. It’s a global economic reset—and markets know it.”
