Stock market chaos in Asia: Trump's tariffs are driving markets into the abyss!

At the beginning of the week, Asian stock exchanges recorded massive losses that can be attributed to US President Donald Trump's new tariff measures. The Nikkei index in Tokyo fell by more than 8 percent at times and was down 2,086.71 points or 6.18 percent an hour after trading began, pushing it to 31,693.87 points. China's Shanghai Composite Index also fell 4.4 percent to 3,342 points, while Hong Kong's Hang Seng Index fell 9.3 percent to 20,730 points. Australia also saw significant losses in early trading. According to the Frankfurter Allgemeine Zeitung Trump's tariff package had already led to a global stock market decline the previous week.

Trump announced the imposition of additional tariffs of 34 percent on Chinese goods, whereupon Beijing announced counter tariffs of the same amount. The People's Daily, the mouthpiece of the Chinese Communist Party, reported on possible aid for the Chinese economy, which could include, among other things, a reduction in key interest rates, an expansion of the budget deficit and the issuance of special loans. The aim of these measures is to stabilize the capital market and restore market confidence. However, the new tariff policy could dampen bilateral trade and put pressure on Chinese exports, it has also been argued.

Global impact on financial markets

The global financial markets have been severely affected, as the DAX also lost over 8 percent in the previous week, representing the largest decline since the Russian war of aggression against Ukraine began in spring 2022. In the USA, the Dow Jones fell to its lowest level since the middle of last year with a weekly loss of over 8 percent. Private investors have suffered billions in losses as a result of the latest developments. According to the New Zurich newspaper Trump also imposed high tariffs on the pharmaceutical industry, which has led to uncertainty for pharmaceutical stocks. Shares of companies such as Roche and Novartis recorded significant price losses.

The economic consequences of these tariffs are serious, and while China has already announced counter-tariffs, Japan is also expected to prepare for possible auto tariffs of up to 25 percent. These could weigh heavily on the economy, although estimates of the economic damage in Japan vary. The Daiwa Institute forecasts a 0.6 percent decline in GDP this year.