The tariff policies recently implemented by the United States are having a significant impact on global financial markets. US President Donald Trump’s tariff policies have resulted in significant devaluation in international markets.
Major indices such as the Nasdaq-100, S&P 500 and Nikkei 225 saw significant declines, with the Nikkei futures market even triggering a circuit breaker. Futures markets anticipate an approximately 80% rate cut in the US this year, leading to a sharp decline in Treasury yields and a loss in the value of the dollar.
The main factor in the current market downturn is the intensifying trade conflict between the world’s two largest economies – the US and China. In response to the tariff hike by the US, China imposed counter-tariffs on various US products, causing the Chinese stock market to fall by 10% in early trading.
President Trump has made it clear that no deal with China is possible until the US trade deficit is resolved, which has further increased uncertainty in the market
The Asian markets have been most affected by the fear prevailing in the financial markets. Japan’s Nikkei fell by 7%, South Korea’s Kospi by 5% and Hong Kong’s Hang Seng by more than 10%. This negative environment also affected the Indian markets, where the Sensex and Nifty depreciated by more than 3.5% in the morning trade.
Despite the current volatility, Trump has backed his tariff policies and said world leaders look forward to talks. These developments have fueled concerns of potential volatility in markets, leading some analysts on Wall Street to predict an economic recession.
