Global Markets Tumble as Trump’s Tariff War Fuels Recession Fears

Wall Street plunged for a third day on Monday, following sharp selloffs across global markets, as investors react to U.S. President Donald Trump’s renewed commitment to steep tariffs. The result: a global shakeup in stock markets, a sharp drop in oil prices, and fresh warnings from financial leaders.

U.S. Markets Deepen Losses

The S&P 500 fell 3.8% in early trading, nearing bear market territory. The Dow Jones dropped 1,200 points, while the Nasdaq slipped 4%. These losses follow the worst week for U.S. stocks since the early days of the COVID-19 pandemic in March 2020.

By the end of last week, the S&P 500 was already down 17.4% from its peak. Canada’s S&P/TSX Composite Index also opened nearly 4% lower.

Trump, doubling down on his strategy, said Sunday that “sometimes you have to take medicine to fix something.” But markets responded with further panic.

Global Sell-Off Continues

Asian markets were hit hard. Hong Kong’s Hang Seng plunged 13.2%, Shanghai fell 7.3%, and Taiwan’s Taiex dropped 9.7%. South Korea’s Kospi lost 5.6%, and Tokyo’s Nikkei 225 closed down 7.8% after briefly halting futures trading.

European markets followed suit. Germany’s DAX index dropped 4.8% mid-day after an initial 10% plunge. France’s CAC 40 fell 5.1%, and Britain’s FTSE 100 dropped 4.9%.

Meanwhile, Middle Eastern markets suffered from a double blow: tariffs and crashing oil prices.

Oil Dives to 2021 Levels

Benchmark U.S. crude fell below $60 per barrel for the first time since 2021. Brent crude is down 15% in just five days and nearly 30% compared to a year ago.

The price dip pressures oil-reliant economies, especially in the Middle East, where 10% tariffs now affect Gulf states like Saudi Arabia, UAE, and Qatar. For many, the current oil price falls below their break-even levels.

JPMorgan Raises Recession Risk

JPMorgan Chase CEO Jamie Dimon warned of long-term damage. In his annual shareholder letter Monday, he raised the chance of a U.S. and global recession to 60%, up from 40% last week.

He emphasized the importance of a swift resolution:

“The quicker this issue is resolved, the better. Some effects become harder to reverse over time.”

Despite previously defending tariffs, Dimon now cautions that prolonged trade disruptions could fuel inflation, slow growth, and deepen instability.

EU and Global Response

Germany’s Economy Minister Robert Habeck didn’t mince words. Calling the rationale behind the tariffs “nonsense,” he urged European unity in response.

Meanwhile, South Korea and Pakistan are sending trade officials to Washington in search of clarity. China’s response was bold but composed. In a state media statement, it declared:

“The sky won’t fall. We have tools.”

What’s Next?

With cryptocurrencies also down, and no signs of market stabilization, economists and analysts are bracing for deeper fallout. Federal Reserve Chair Jerome Powell faces pressure to cut interest rates, but he remains cautious due to rising inflation risks.

In the meantime, Canadian businesses and global investors continue to explore alternative trade routes and partnerships, including with Europe, to offset the ripple effects of U.S. tariffs.

More…

• https://www.cbc.ca/news/business/monday-markets-tariffs-1.7503498
• https://apnews.com/live/stock-markets-economy-tariffs-updates
• https://edition.cnn.com/2025/04/06/business/japan-nikkei-plunges-hnk-intl/index.html