Asian Markets Plunge as Trump’s Tariffs Trigger Global Sell-Off
Sharp Losses Across Asia Mark Worst Trading Day in Years as Fears of a Global Trade War Deepen
Asian stock markets suffered historic drops on Monday as Trump tariffs ignited panic across financial hubs. Hong Kong’s Hang Seng lost over 13%, marking its steepest single-day fall since the 2008 financial crisis.
Japan’s Nikkei 225 dropped nearly 8%, sliding to its lowest level in a year and a half. Mainland China’s key index, the Shanghai Composite, ended down 7.3%, while Taiwan’s major benchmark sank 9.7%—setting a new record for the largest daily drop.
The sell-off followed new U.S. trade measures announced late last week. President Trump introduced a broad range of import duties, now reaching between 10% and 54% on products from dozens of countries. The announcement added fuel to fears of a prolonged global trade standoff.
Even the normally stable Australian market wasn’t spared—its ASX 200 index dropped 4.2%, entering correction territory with an 11% decline from its recent high.
The new U.S. tariff regime hits a wide mix of economies, including key allies and lower-income exporters. Nations like Japan and South Korea face new duties of 26%. Vietnam has been slapped with 46% tariffs, while Cambodia, Thailand, and China now face some of the highest rates—49%, 36%, and 54% respectively. A uniform 10% tariff is also being applied to goods from countries such as Singapore, Australia, and New Zealand.
“These changes are hitting Asia the hardest,” noted Qian Wang, Asia Pacific chief economist at investment firm Vanguard. She added that while limited negotiations might happen, higher trade barriers now appear to be a long-term shift.
Several economies in the region, especially those with heavy export dependency like Vietnam and Bangladesh, are already seeing the impact. U.S.-bound apparel and electronics shipments from these countries are now far less competitive.
Major financial institutions are now adjusting their forecasts to reflect growing economic risks. Goldman Sachs revised its outlook, now assigning a 45% probability of a U.S. recession in the coming year—up significantly from a previous 35% estimate. JPMorgan’s projections are even more pessimistic, with a 60% chance of a global downturn.
The sharp hike in U.S. trade duties is expected to push the country’s average tariff level to over 25%, according to new estimates. This could lift prices domestically by 2% and knock nearly a full percentage point off economic growth.
In Asia, the impact is projected to be more severe. Schroders, a UK-based asset manager, estimates that countries like China and Vietnam could see GDP losses above 0.5%, while Japan and the EU face slightly smaller contractions.
Julia Lee, Head of Client Coverage at FTSE Russell, pointed out that rising tariffs are reshaping market sentiment. “Higher duties are shifting expectations toward slower growth and the possibility of inflation creeping in,” she said.
Despite sharp reactions across equity markets, U.S. officials have shown no sign of reversing course. Even after China’s immediate counter-tariffs on American products, Trump administration representatives dismissed concerns about long-term economic damage.
Traders remain cautious, especially as retaliation appears likely from other U.S. trading partners. The European Union has hinted it is preparing its own response. Meanwhile, market watchers expect continued volatility as uncertainty lingers around future negotiations.
Qi Wang, Chief Investment Officer at UOB Kay Hian, noted that Asian markets may remain volatile for some time. “Short-term movements will depend on how policymakers in the U.S. and China react. We’re also watching how U.S. political sentiment evolves—consumer frustration is already visible,” he told CNBC.
Global stock indexes, including the S&P 500, Dow Jones, and Nasdaq, recorded losses of more than 5% last Friday alone. The Nasdaq has now dropped over 20% from its December peak, officially entering bear market territory.
