Asian stocks experienced their worst drop in decades on Monday following US President Donald Trump’s announcement of new tariffs on most countries. Global markets continued to reel from the news, with European banks and defence firms seeing significant declines.
The Shanghai Composite fell by over 8%, Hong Kong’s Hang Seng dropped more than 13%, and Japan’s Nikkei 225 closed down by 7.8%. The US tariffs, which range from 10% to 46%, have hit countries such as China, South Korea, Vietnam, Cambodia, Thailand, and Bangladesh.
Asian economies are sensitive to the risk of a global trade war triggering a slowdown or recession in the US. Investors have caught up with big falls seen in other markets on Friday as they were closed for public holidays. The Shanghai Composite closed 7.3% lower, while Taiwan’s Weighted Index lost 9.7%, its largest drop on record.
Several major Wall Street firms have revised their recession forecasts in response to Trump’s announcement. Goldman Sachs now estimates a 45% chance of the US falling into recession within the next 12 months, up from a previous estimate of 35%.
The impact of US tariffs is particularly severe for small open economies like Bangladesh and Vietnam. The country relies heavily on exports to the US, with Bangladesh exporting $8.4 billion worth of garments annually.
As Trump’s announcement deepens the global stock market turmoil, countries are preparing for the worst. Asia’s biggest economy, China, has also hit back with its own tariffs, exacerbating the crisis. Global stocks have lost trillions in value since the US tariffs were announced, and it remains to be seen how markets will recover from this latest development.
Source: https://www.bbc.com/news/articles/c934qzd094wo