Global Shares Slide as Trump Tariffs Loom

Stock markets across Asia and Europe have experienced a significant decline following President Donald Trump’s announcement that new tariffs, set to be unveiled this week, will apply to all countries, rather than just those with the largest trade imbalances with the United States.

The president is poised to reveal a comprehensive slate of import taxes on Wednesday, an event he has dubbed America’s “Liberation Day.” This new round of tariffs will be in addition to existing levies imposed on aluminum, steel, and vehicles, as well as increased tariffs on all goods imported from China. “You’d start with all countries,” Trump stated while speaking to reporters on Air Force One. “Essentially all of the countries that we’re talking about.”

The impact of these potential tariffs was evident on Monday, with Japan’s Nikkei 225 benchmark falling more than 4%, while South Korea’s Kospi index dropped by 3%. In the UK, the FTSE 100 index fell approximately 1.2%, and both Germany’s DAX index and France’s CAC 40 saw declines of around 1.7%.

Amidst the market turmoil, gold prices surged to a record high of $3,128.06 per ounce, as investors often turn to gold during periods of economic uncertainty and declining stock prices.

Shanti Kelemen, chief investment officer at M&G Wealth, remarked to the BBC that there could be “quite a lot of uncertainty” in the markets, especially given that previous tariff announcements have led to fluctuations. She noted that Japan, heavily reliant on its export markets, could be particularly vulnerable. “They have a lot of automakers and a very significant presence in the semiconductor market—an area that hasn’t been targeted yet, but that could change,” she added.

Over the weekend, Trump’s advisers echoed his sentiments regarding the planned tariffs, suggesting they could raise trillions of dollars and create jobs in the U.S. Pete Navarro, the president’s top trade adviser, highlighted the potential revenue from the tariffs, estimating that the tax on all car imports could generate $100 billion annually. He also claimed that the overall tariffs could yield $600 billion each year, roughly one-fifth of the total value of goods imported into the U.S.

A White House fact sheet released last week indicated that a 10% tariff on every import could lead to the creation of nearly three million jobs in the U.S. However, there are growing concerns that these tariffs could exacerbate inflation—a promise Trump made to curb during his presidential campaign—if companies pass the increased costs of imports onto consumers. Should companies absorb these costs instead, it could negatively impact profits, potentially affecting future investments.