Trump's Tariff Storm Sparks Global Market Mayhem | Image Source: www.bbc.com
WASHINGTON, D.C., April 7, 2025 – A few days after President Donald Trump announced a series of new global tariffs, global financial markets are at a starting point. With economic panic and key U.S. indices of skiing to bear territory, investors, foreign leaders, and even some in the president’s party, are sounding alarms about the possible fall. However, Trump remains unbearable.
What caused this market chaos?
On Wednesday, April 2, Trump released a wide range of reciprocal tariffs, affecting virtually all trading partners in the United States. Tariffs range from 10 to 54 per cent for goods from countries such as China. In 24 hours, the stock market reacted with a nose, echoing the worst days of the financial accident VOCID-19 in 2020. On Monday morning, the Dow Jones fell to over 1,200 points and the S sentientamp; P 500 briefly entered the bear market.
Markets in Asia, Europe and the United States were frustrated. According to BBC News, Hong Kong’s Hang Seng Index suffered an incredible loss of 13.2%, the worst since the global recession in 2008. Shanghai composite fell by 7.3%, while Japanese Nikkei 225 fell by 7.8%. In Australia, ASX 200 fell by 4.2% and South Korea by 5.6%. The main Wall Street indices average over 5% per week.
As Trump rules tariffs as excessive justice for unfair world trade, economists warn that they can push the global economy into recession. According to Goldman Sachs, the likelihood of a US recession in the next year has increased from 35% to 45%, and JPMorgan estimated the likelihood of US and global contraction to be 60%.
How did Trump react?
Back from a golf trip to Florida, Trump took his social media platform, Truth Social, to respond to criticism.
“Don’t get wet! Don’t be stupid! Don’t be a PANICAN (a new game based on weak and stupid people!). Be strong, courteous and patient, and GRANDSE will be the result.”
Critics quickly mocked the new term “Panican”, but the underlying message was clear: Trump will not come back. In fact, it seems to see the current confusion as a necessary correction, a bitter pill for future prosperity.
“Sometimes you have to take medication to fix something,” he said, comparing tariffs with a painful but essential remedy for trade imbalances perceived by the United States.
What are the economic risks?
The tariffs, in Trump’s view, are designed to revitalize domestic manufacturing and correct decades of trade deficits. However, critics argue that their approach ignores the realities of the high-tech economy based on the current service.
Greg Mankiw, former economic advisor under George W. Bush, did not speak:
“If President Trump does it, it’s a big-scale economic bad practice, which we haven’t seen in half a century. »
Others, such as Lael Brainard, a former Federal Reserve official, warn that American consumers already see the impact. He noted the charging of up to 20% on consumer goods such as iPhones and washing machines, noting that millions of 401 (k) accounts were a serious success.
The Federal Reserve, for its part, is facing a riddle. President Jerome Powell warned that price increases could exacerbate inflation, which would complicate the central bank’s response. Investors now expect at least four interest rate reductions this year, a clear sign that the market is in favour of economic decline.
Are these rates achievable in the long term?
Trump’s ultimate goal seems to be a complete redevelopment of world trade in favour of the United States. At a press conference of the Oval Office with Israeli Prime Minister Benjamin Netanyahu, he reiterated his “America First” strategy:
“We can make a good deal… a good deal for the United States, not a good deal for others. “
However, even allies like Japan and Israel have expressed strong opposition. Japanese Prime Minister Shigeru Ishiba called tariffs a “national crisis” and warned that they could deter Japanese investments in the US Netanyahu, meanwhile, presented a proposal to eliminate Israel’s trade deficit, only to be satisfied with Trump’s reminder of the billions of aid that the US is providing.
European leaders were also within the reach of future talks. The President of the European Commission, Ursula von der Leyen, said the EU would look for business opportunities, citing “large opportunities” beyond the US.
Can America really bring manufacturing back?
On the surface, Trump’s vision is a nostalgic name for the industrial boom of the late 19th century. But the reconstruction of national plants, energy infrastructure and supply chains could take a decade or more, and it is a bipartite commitment, which is still unlikely.
In addition, according to CNN, economic experts question whether the Americans will fill these low-wage manufacturing jobs or whether US companies can cope with the cost effectiveness of foreign competitors. Risk? More expensive goods, lower wages and lost opportunities in high growth sectors such as IV, biotechnology and cloud computing.
Even Trump’s economic advisor, Peter Navarro, admitted that the real trade reform goes beyond tariffs. Speaking of CNBC, he said countries like Vietnam should renew their tax and regulatory systems – not just reduce tariffs – to meet US demands.
Who else wants to lose?
Asia has gained the weight of this tariff tsunami. As the BBC and PBS NewsHour have reported, countries such as Vietnam (46% of tariffs), Bangladesh (37%) and Cambodia (49%) face future uncertainties. These countries are vital supply chains for American brands like Nike and Gap.
According to the Bangladesh Manufacturers and Exporters Association, Bangladesh exports more than $8.4 billion annually to the United States. A sudden increase in tariffs could devastate their economies, already vulnerable to global shocks.
China, Trump’s permanent goal of commercial air, responded with its own set of tariffs, increasing the already dark climate for global investors. This gradual escalation has increased volatility in US markets, leading companies like JPMorgan to reduce growth expectations and increase the likelihood of a global slowdown.
Are there any political cracks?
Although Trump retains a good grip on the GOP, dissent is increasing. A handful of Republican senators co-sponsored a law to reaffirm Congress’ authority over trade policy. However, the leader of the majority in the Senate, John Thune, stated that the measure would not be put to the vote, citing a lack of support in the Assembly.
President Mike Johnson remains firmly in Trump’s corner, telling CNN that the President must be given the “lease” to correct trade imbalances. But beyond Capitol Hill, frustration is increasing. Bill Ackman, a hedge fund manager, publicly warned against a self-inflicted economic crisis, which then apologized for attacking individuals but not raising the alarm.
Even Elon Musk weighed, suggesting a free zone between Europe and North America. Navarro rejected Musk’s comments, saying, “He sells cars. That’s what he does.” The involvement was clear: Trump’s team does not see business leaders as impartial advisors.
And then what?
While Trump insists that pain will now give prosperity later, economists are still not convinced. Wall Street is broken, foreign governments are cautious, and the average American is starting to feel pressure on the exit counters.
As fears of inflation and investment decrease, the question becomes whether the country can withstand enough economic discomfort to see if Trump’s strategy actually pays. Or if, as some have warned, all this will fall as one of the greatest political mistakes in modern American history.
Until then, the president clings to his script.
No one but me would, he told the reporters. “We have an opportunity to restore the trade table.”
But for now, the only thing that has been adjusted is investor confidence, not how it could have waited.
About The Author
