Stock markets across Europe and Asia nosedived on Monday as growing concern over the economic fallout of President Donald Trump’s trade tariffs rattled investors. London’s FTSE 100 slumped by over 5% at the open, following its sharpest drop in five years last Friday. Germany’s DAX initially fell by 10%, while Hong Kong’s Hang Seng endured one of its worst single-day losses on record.
The sell-off follows Trump’s surprise tariff announcement last Thursday, which imposed steep levies on multiple trading partners. The move triggered the worst week for US markets since the onset of the Covid-19 crisis in 2020, wiping over $5 trillion from the S&P 500’s value. Despite mounting pressure, Trump insisted on Sunday that such actions are necessary, saying, “Sometimes you have to take medicine to fix something.”
Economists now fear the tariffs could have a far-reaching impact. Goldman Sachs estimates a 45% chance of a US recession if no trade agreements are reached, while JP Morgan puts the risk at 60%. KPMG warned the UK’s GDP growth could shrink by 0.8% in 2025.
The looming trade war between the US and China has also driven down oil prices, with Brent crude falling over 4%. Manufacturing sentiment dipped too, as copper prices slid - while even gold, a traditional safe haven, saw a small decline.
