April 07, World (LNW): Equity markets across Asia experienced a dramatic sell-off on Monday, intensifying concerns over a growing global economic fallout triggered by sweeping new tariffs imposed by the United States.
Investor sentiment took a sharp downturn following the announcement of a blanket tariff on Japanese exports by the White House, a move that has alarmed financial analysts and policymakers alike.
In Tokyo, stocks opened in freefall, with Japan’s leading Nikkei 225 index plunging by more than 8% in early trading. It has now slipped below the psychological 33,000-point threshold — a level not seen since August of the previous year.
The broader Topix index also faced steep losses, initially dropping by over 7.5% before clawing back some ground.
Amid the turmoil, Japanese Prime Minister Shigeru Ishiba addressed parliament, acknowledging the severe economic impact of Washington’s aggressive trade stance.
He indicated that diplomatic efforts would continue in hopes of persuading the US to ease its tariff regime, though he warned that positive outcomes were unlikely to materialise in the short term.
In the meantime, Ishiba said his government was preparing a suite of emergency economic measures aimed at protecting domestic industries and safeguarding jobs.
The crisis has its roots in a dramatic escalation of trade tensions spearheaded by US President Donald Trump, who announced a sweeping 24% tariff on all Japanese imports, set to take effect later this week.
Despite Japan being a long-standing defence ally of the United States, the move has been viewed by many as a signal that no country is exempt from Washington’s new protectionist approach.
The shockwaves were felt well beyond Japan. South Korea’s Kospi index dropped by nearly 5%, triggering automatic trading halts designed to prevent market panic.
Meanwhile, Taiwan’s Taiex nosedived almost 10% shortly after markets opened, prompting circuit breakers for major tech players such as TSMC and Foxconn, whose shares each fell by close to the daily maximum limit.
In Australia, the ASX 200 index recorded losses of over 6% during morning trade, while across the Tasman, New Zealand’s NZX 50 index slipped by more than 3.5%.
Regional financial authorities are reportedly monitoring the situation closely, with several preparing to intervene should further instability threaten local markets.
The turbulence in Asian markets follows on the heels of a volatile spell on Wall Street, where US stocks endured their worst two-day stretch in half a decade.
Futures trading pointed to further declines ahead of the opening bell, with the S&P 500 teetering near the threshold of a bear market — defined as a 20% drop from its recent peak.
Adding fuel to investor anxiety, China responded to the US tariff blitz with retaliatory measures of its own, slapping a 34% levy on all American goods. The tit-for-tat escalation has reignited fears of a prolonged and damaging trade war that could disrupt supply chains, depress consumer demand, and undermine the fragile post-pandemic recovery in several economies.
Despite mounting global unease, President Trump struck a defiant tone while speaking to reporters aboard Air Force One, asserting that the US economy was becoming stronger and would ultimately emerge more competitive. However, he declined to offer any assurances regarding future market behaviour.
With financial markets in a tailspin and diplomatic channels under strain, the next few days could prove critical in determining whether this trade dispute can be defused — or if the world is heading towards a full-blown economic crisis.
