Stock markets around the world plummet as worries about new US tariffs grow.
Global stock markets fell Thursday as worries about how people and companies would pay for the new, comprehensive U.S. tariffs increased. An economic downturn was feared because of the uncertainties.
Losses accelerated throughout the morning as the S&P 500, which measures the 500 biggest American corporations, opened more than 3% lower in the United States. Among the most severely impacted were well-known consumer brands like Apple and Nike.
Similar to earlier losses in Asia, the UK’s FTSE 100 stock index sank 1.5%, while other European markets also experienced a decrease.
Gold, which is seen as a safe-haven asset during market turbulence, surged to a record high in value as stock prices fell.
Trump’s Tariff Announcement
In addition to raising levies on dozens of nations, including important trading partners like China and the European Union, U.S. President Donald Trump imposed a 10% tax on imports from throughout the globe.
The additional tariffs included a 46% tariff on Vietnamese items and a 54% tax on Chinese imports into the United States.
Asian markets crashed after Trump’s decision. The Nikkei index of Japan ended the day over 3% lower, and the Hang Seng index of Hong Kong fell 1.5%.
In Europe, France’s CAC 40 lost 2.9%, while Germany’s DAX index fell about 2%.
On Thursday, gold prices jumped to an all-time high of $3,167.57 an ounce before falling to $3,090.
The Nasdaq fell more than 4%, and the Dow Jones opened down more than 3% in the United States.
Additionally, the value of the US dollar declined relative to a number of other currencies. After a brief surge above $1.32, the British pound declined.
Industries Impacted by Tariffs
Trump’s move on Wednesday did not impact about a third of U.S. imports, which include important strategic resources like steel, as well as goods and automobiles from Canada and Mexico. The White House explained, however, that this was because those industries had either already been the subject of separate tariffs or were scheduled to do so soon.
Concerns about how Trump’s tariffs would affect the world economy are growing among traders, who worry that they may increase inflation and impede economic expansion.
According to Infrastructure Capital Advisors CEO Jay Hatfield, “this is the worst-case scenario.”
Economic Effects and Worldwide Responses
The additional tariffs might have a big impact on consumer spending, which makes up between 10% and 15% of the world economy, according to economists.
Principal Asset Management analysts estimate that these actions might slow Europe’s economic growth by almost 1%, and further harm is anticipated if the EU retaliates.
Their initial prognosis for China’s economic growth was 4.5%, but it has since been lowered to 4.2%.
Seema Shah, the company’s chief global strategist, cautioned that a recession is probable in the United States unless more economic changes are made, such as significant tax cuts, which Trump has also pledged.
“It is definitely feasible to achieve the administration’s stated objectives of reviving manufacturing and increasing economic investment,” she said. “But the truth is that if such a change occurs at all, it would take years.”
“With little immediate benefit, these high import duties will act as an immediate drag on the economy in the interim.”
Stock Market Drops for Big Businesses
The stock values of a number of significant corporations experienced steep drops:
Nike, the largest loser on the S&P 500, saw its shares fall more than 11%, with the company producing the majority of its clothing in Asia.
Apple, which is mostly dependent on Taiwan and China, dropped 9%.
Major electronics shop Best Buy had a 12% decline, and Target saw a 9% decline.
Harley-Davidson had a 4.5% decline after the EU imposed retaliatory tariffs on the company during Trump’s first term.
Reactions of the European Market
Due to high tariffs on important manufacturing nations, Adidas, the massive sportswear company, saw its shares fall more than 10%, and Puma, its rival, plunged more than 9%.
Following tariff statements targeting the EU and Switzerland, luxury goods businesses also suffered: Louis Vuitton Moet Hennessy (LVMH) plummeted 5%, while jewelry maker Pandora sank more than 12%.
