Overseas financial markets plummeted in early trading Monday and U.S. stock futures came under renewed selling pressure after leading indexes crumbled last week amid investor fears over the economic fallout from the Trump administration’s latest tariff salvo.
Tokyo’s Nikkei 225 index tumbled 7.8%. Shares in Hong Kong plunged more than 12% — their worst day in more than 16 years — while in mainland China, the Shanghai Composite Index shed 8.4 percent. In Taiwan, the Taiex fell 9.7%. South Korea’s Kospi lost 5.6%.
Australia’s benchmark stock index closed 4.2% lower after recovering slightly from a loss of more than 6%.
Stock futures
Dow Jones Industrial Average futures had fallen 1,573 points as of 3:08 a.m. EDT, according to Bloomberg, while Nasdaq futures were off 992 points and S&P 500 futures had lost 251.
Stock markets around the world sold off last week after President Trump on April 2 announced a minimum 10% tariff on all U.S. imports and “reciprocal” levies on nearly 90 countries. The global tariff took effect on Saturday, while the matching tariffs are set to hit on April 9.
The scale of the tariffs surprised investors, sending U.S. stocks into their sharpest decline in five years and wiping out trillions in investor wealth. Many economists warn that imposing broad tariffs on goods shipped into the U.S. could drive up inflation, chill spending by consumers and hurt economic growth.
Retaliating against the U.S., China said Friday it will place a 34% tariff on imports of all U.S. products starting April 10. Beijing in March also started charging a 15% tax on American farm products, including chicken, pork and soy beans.
“China and the U.S. are now locked in a game of chicken, with the risk of a severe global trade war looming over financial markets,” analysts with Pantheon Macroeconomics told investors in a note.
The S&P 500 has declined nearly 14% since Mr. Trump unveiled the latest tariffs last week, while the blue-chip Dow is down 12%. The Nasdaq has decreased nearly 16% over that period, putting the tech-heavy index in a bear market — when stocks fall at least 20% from their most recent high.
Highest tariffs since 1909
Since re-entering the White House in January, Mr. Trump has also slapped 25% tariffs on imports from Canada and Mexico, sharply raised import duties on Chinese goods, and put 25% levies on foreign cars, among other measures aimed at U.S. trading partners.
The average U.S. tariff rate on imported goods is now at its highest level since 1909, according to the Yale Budget Lab.
Mr. Trump said Sunday that he won’t retreat from his tariffs unless other nations even out their trade with the U.S.
Speaking to reporters aboard Air Force One late Sunday, the president said he didn’t want global markets to fall but that “sometimes you have to take medicine to fix something.”
Senior Trump administration officials have staunchly defended their trade policies, saying on Sunday that more than 50 countries subject to the latest round of tariffs have requested talks.
Speaking on “Face the Nation” on Sunday, Commerce Secretary Howard Lutnick said the tariffs are “definitely going to stay in place for days and weeks. The president needs to reset global trade.”
Despite last week’s market rout, some Wall Street economists expect the Trump administration to ease tariffs on certain countries in the months ahead in return for their lowering trade barriers. That would likely help shore up stocks.
“Our assumption is that, over the next few months Trump will make ‘deals’ with many countries, although China may be the exception,” Paul Ashworth, chief North America economist with Capital Economics, said in a research note. “Once it becomes clear that he is willing to accept relatively minor concessions in exchange for scaling back those tariffs, equities should rebound.”
The risk, analysts warn, is that Mr. Trump instead rolls out additional tariffs or seeks to punish trading partners that deploy their own countermeasures.
