Following last week’s two-day Wall Street catastrophe, global markets fell sharply on Monday. U.S. President Donald Trump has stated that he will not back down from his broad new tariffs that have sparked a worldwide trade crisis.
With China and other nations swiftly retaliating, nations are frantically trying to find out how to react to the tariffs.
A major campaign pledge was accomplished by Trump’s tariff campaign, as he changed the rules of the global trading system without consulting Congress.
Trump, who has long criticized international trade agreements as unjust to the United States, made the move decades in the making.
A new era of economic instability with no end in sight is slated to begin Wednesday with the collection of the higher rates.
The stock market in Hong Kong declines, but officials caution against taking dramatic measures.
Paul Chan, the financial secretary for Hong Kong, believes the market’s current volatility does not call for any extreme measures to be implemented and that the city would continue to operate as a free port.
Following Monday’s 13.2% decline in the city’s stock market, Chan assured reporters that it was operating in a disciplined fashion with strong buying and selling activity.
However, retaliatory actions and interest rate policies from other nations will lead to more volatile capital flows, and the U.S. tariffs would unavoidably induce market fluctuations.
He denounced the most recent U.S. tariffs as “bullying and unreasonable,” claiming they had seriously hampered the global economic recovery effort and disrupted global supply networks.
Due to its semi-autonomy, Hong Kong, a former British colony that rejoined China in 1997, can have policies and an economy that differ from those of mainland China.
February saw an increase in German exports to the US as businesses braced for tariffs.
Before U.S. President Donald Trump’s proposal of broad tariffs, Germany reported a significant increase in exports to the United States in February.
Germany is a major exporter and has the largest economy in Europe. For the first time in almost ten years, the United States overtook China as its largest trading partner last year.
Germany’s exports to the United States reached 14.2 billion euros ($15.6 billion) in February, an 8.5% increase over the previous month, according to data released Monday by the Federal Statistical Office.
At 131.6 billion euros, German exports to the rest of the world, including other EU countries, increased 1.8% during the same time period.
The head of the BGA, Germany’s exporters association, stated that the increase in shipments to the United States in February “must not deceive us” because it was the result of “anticipatory effects.”
In a statement, Dirk Jandura said that “German firms moved deliveries forward and U.S. firms bunkered.”
In the new world order, “Germany and the EU must quickly find their role” and “approach the global South with pragmatic offers,” he continued.
“The comprehensive U.S. blow offers a unique opportunity to position Europe as a reliable and trustworthy partner,” Jandura contended.
Trump will meet with Netanyahu for the first time since the tariff announcement.
Benjamin Netanyahu, the prime minister of Israel, will be the first foreign leader to visit Washington since U.S. President Donald Trump imposed tariffs on nations worldwide on Monday.
The outcome of Netanyahu’s visit may influence how other international leaders attempt to confront the new tariffs, even if it doesn’t succeed in lowering or doing away with Israel’s 17% levy.
The tariffs are the main focus of Netanyahu’s hurriedly planned trip to Washington, although his administration has emphasized that the two leaders will also talk about important geopolitical problems, including the war in Gaza, tensions with Iran, Israel-Turkey relations, and the International Criminal Court.
U.S.-Israel relations specialist Eytan Gilboa predicted that Trump would use the tariffs as leverage to pressure Netanyahu into making concessions.
Trump might put pressure on Netanyahu to take steps to end the war in Gaza, even by negotiating a short-term truce with Hamas that would stop hostilities and allow for the release of additional prisoners.
Israel said last week that it was eliminating all taxes on U.S. goods, mostly on imported food and agricultural items, as a preventative measure.
As he arrived at a meeting of European Union trade ministers in Luxembourg on Monday, Robert Habeck, the vice chancellor of Germany’s outgoing government, said that he and his colleagues must act “calmly, prudently but also clearly and with determination.”
He said that means “being clear that we are in a strong position — America is in a position of weakness.”
Germany’s economy minister calls US tariffs “nonsense,” arguing that Europe is in a strong position and that the premise of U.S. President Donald Trump’s comprehensive tariffs is “nonsense.”
Habeck stated that the EU should remain united, claiming that previous attempts by individual nations to obtain exclusions have failed.
He emphasized the value of contacts and economic agreements with other parts of the world, including Asia, the Pacific, and South America.
“Even the basis of the calculation is nonsense: The assumption that a trade budget surplus or deficit is a problem in itself is a wrong estimation,” the German minister stated about Trump’s tariffs.
Indonesia declares it would not retaliate for the tariffs imposed by Trump.
Instead of retaliating against Trump’s 32% tariff, Indonesia says it will engage in talks and diplomacy to find win-win solutions.
According to Coordinating Economic Affairs Minister Airlangga Hartarto, Indonesia, which had a $18 billion trade surplus with the United States last year, would consult with business executives to develop a plan for dealing with the tariffs and figuring out how to lower the imbalance, the minister announced Monday.
“To reduce the $18 billion trade deficit, we will increase the volume of purchases,” Hartarto stated.
China charges the US with economic aggression, protectionism, and unilateralism.
China charged the US on Monday with economic coercion through tariffs, protectionism, and unilateralism.
Lin Jian, a spokesman for foreign affairs, told reporters that prioritizing “America First” over international norms is a common practice of protectionism, unilateralism, and economic bullying.
Following two rounds of 10% tariffs in February and March, Trump imposed an extra 34% duty on Chinese goods this week, citing Beijing’s involvement in the fentanyl problem as the reason.
The governments of China and others swiftly retaliated. China declared that its tariff rate on American imports would be 34%.
Lin claimed that the new tariffs had a major negative influence on the global economic recovery and undermined the stability of global supply chains and industry.
Threats and coercion are ineffective strategies for dealing with China. China will vigorously defend its rightful interests and rights,” Lin continued.
Early trading saw a decline in European shares.
Early trading saw a decline in European stocks, with Germany’s DAX dropping 6.5% to 19,311.29. Britain’s FTSE 100 fell 4.5% to 7,694.00, while the CAC 40 fell 5.7% to 6,861.27 in Paris.
The top trade negotiator from South Korea will travel to Washington.
This week, South Korea’s chief trade negotiator will travel to Washington to discuss measures to lessen the negative effects of the Trump administration’s higher tariffs on South Korean companies and to voice Seoul’s worries about them.
Inkyo Cheong, the trade minister of South Korea, is scheduled to meet with U.S. authorities, including U.S. Trade Representative Jamieson Greer, according to a statement released Monday by the country’s Ministry of Trade, Industry, and Energy.
According to the ministry, Cheong intends to conduct talks to lower the 25% tariffs imposed on South Korean goods and obtain comprehensive information on the trade plans of the Trump administration.
Business executives from Tesla and other US companies meet with Chinese officials.
On Sunday, corporate executives from Tesla, GE Healthcare, and other American companies met with Chinese government officials. It urged them to handle the tariff issue with “concrete actions” and “reasonable” words.
At the meeting with 20 U.S. companies, Vice Minister of Commerce Ling Ji stated,
“The United States has used all sorts of excuses to announce indiscriminate tariffs on all trading partners, including China, in recent days, severely harming the rules-based multilateral trade system.”
Ling continued, “China’s countermeasures are a way to urge the U.S. to return to the right path of the multilateral trading system, as well as to protect the rights and interests of companies, including American ones.”
According to a Ministry of Commerce transcript of the meeting, Ling also pledged that China would continue to welcome international investment.
Malaysia desires a coordinated reaction to tariffs from Southeast Asia.
Zafrul Abdul Aziz, Malaysia’s trade minister, stated that his nation hopes to create a unified Southeast Asian reaction to the extensive U.S. tariffs.
Zafrul told a news conference on Monday that Malaysia, this year’s chair of the Association of Southeast Asian Nations, will chair the regional bloc’s Special Economic Ministers’ Meeting on April 10 in Kuala Lumpur to discuss the tariff measures’ wider implications on regional trade and investment.
Zafrul stated, “We are examining the flow of investments, macroeconomic stability, and ASEAN’s concerted response to this tariff issue.”
In order to minimize any possible interruptions to regional supply chain networks, ASEAN leaders will also convene to review the strategies of their member states.
A delegation from Pakistan’s government will travel to Washington.
According to authorities on Monday, Pakistan intends to send a government delegation to Washington this month to talk about ways to get around the United States’ 29% tariffs on its imports.
The event transpired two days after the prime minister of Pakistan requested that the finance minister provide him with suggestions for resolving the matter.
Pakistan, which mostly depends on loans from the International Monetary Fund and others, supplies the United States with textiles and other goods valued at about $5 billion.
On Monday, the Pakistan Stock Exchange experienced a sharp decline. A 5% decline in its primary KSE-30 index caused the market to halt trade for an hour.
Middle Eastern markets follow the decline in oil prices.
Energy-producing countries that depend on oil sales to fuel their economies and government expenditure were squeezed by the combined effects of the new U.S. tariffs and a steep drop in oil prices, which caused Middle Eastern stock markets to plummet.
A benchmark over the past five trading days, Brent crude has dropped by about 15%, and a barrel of oil now costs just over $63. Compared to a year ago, when a barrel cost more than $90, that is an almost 30% decrease.
The predicted break-even price for producers is far higher than the cost per barrel.
Additionally, the Gulf Cooperation Council states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates were subject to 10% duties as a result of the new tariffs. Higher duties apply to other Middle Eastern countries, such as Syria (41%) and Iraq (39%).
As the week began, the Dubai Financial Market exchange experienced a 5% decline. There was a 4% decline on the Abu Dhabi Securities Exchange.
There were also losses in markets that opened on Sunday.
The Tadawul stock exchange in Saudi Arabia experienced a trading decline of more than 6%.
The market value of the sixth-most valuable firm in the world, Aramco, the state-owned oil company of Saudi Arabia, plummeted by more than 5% on its own.
China exudes confidence by declaring that “the sky won’t fall.”
Even though Shanghai and Hong Kong markets fell on Monday, Beijing struck a note of confidence.
“The heavens will not descend.
The Communist Party’s official newspaper, The People’s Daily, stated, “We know what we are doing and we have tools at our disposal when faced with the indiscriminate punches of U.S. taxes.”
On Friday night, China announced a slew of countermeasures to Trump’s duties, including its own 34% tariffs on all U.S. goods that will take effect on Wednesday.
The Australian dollar falls to its lowest points since the beginning of the pandemic.
For the first time since the early months of the COVID-19 pandemic, the Australian dollar dropped below 60 U.S. cents on Monday.
Australian Treasurer Jim Chalmers stated that the decline was a result of market expectations for four interest rate cuts in Australia this year, as well as worries about the Chinese economy.
“Our modeling indicates that we anticipate significant impacts on both Chinese and American growth, as well as a surge in American inflation,” Chalmers stated.
“We anticipate more controllable effects on the Australian economy, but we still anticipate a decline in the country’s GDP and an effect on prices here as well,” he continued.
Australia was given the minimal baseline 10% tax on U.S. imports by the Trump administration. For many years, the United States and Australia have had a surplus in trade.
Indian equities decline as the pressure to sell increases.
In the midst of the pandemic, Indian stocks experienced their largest single-day percentage decline since March 2020 on Monday.
Following the start of trade, the benchmark BSE Sensex and the Nifty 50 index both fell by almost 5% before marginally rebounding. Later, both were down roughly 4%.
As markets panic, Trump declares he is not reversing his tariff stance and refers to them as “medicine.”
Addressing his plans to impose the taxes that have rocked financial markets, sparked recession fears, and upended the global trading system, President Donald Trump stated on Sunday that he will not back down from his sweeping tariffs on imports from most of the world unless nations balance their trade with the United States.
“Sometimes you have to take medicine to fix something,” Trump told reporters on Air Force One, adding that while he didn’t want the world markets to plummet, he wasn’t worried about the large sell-off either.
His remarks came as Trump’s aides attempted to allay market fears by claiming that more than 50 countries had contacted them about starting talks to reduce the tariffs, and as global financial markets seemed poised to continue steep drops once trading begins Monday.
Trump claimed to have had conversations with other leaders worldwide, including those in Europe and Asia. They are desperate to reach an agreement. We won’t have any imbalances with your country, I added. I consider a deficit to be a defeat, so we won’t do that. We will either have surpluses or, in the worst-case scenario, break even.
Asian markets plummet as the effects of tariffs worsen.
Additionally, U.S. futures indicated more weakness.
Market watchers predict investors will experience more erratic fluctuations in the days and weeks ahead, as a temporary settlement to the trade war seems improbable.
