US Tariffs Impact Global Economy
The global financial market has been hit hard following the United States’ latest tariff imposition. In response to President Donald Trump’s announcement of reciprocal tariffs, Asian stock markets have plunged, while the Japanese yen strengthened against the US dollar.
According to a Reuters report, market analysts were caught off guard by the unexpectedly aggressive tariff measures, which have sent shockwaves through the financial sector.
Heavy Tariffs on Chinese and Taiwanese Goods
The technology sector faced a significant downturn, as new tariffs exceeding 30% were introduced on manufacturing hubs in China and Taiwan, effectively increasing the total levy on Chinese imports to 54%.
Ben Wiltshire, a Citi global rates trading strategist, commented, “The US effective tariff rate on all imports is now at its highest level in over a century.”
Stock Market Reaction: Tech Sector Suffers Heavily
Following the tariff announcement:
- Nasdaq futures plummeted 4%, erasing over $760 billion from the market value of the Magnificent Seven tech giants.
- Apple shares fell nearly 7%, as the company heavily relies on Chinese manufacturing for iPhones.
- S&P 500 futures dropped 3.3%, while FTSE futures saw a 1.8% decline.
- European stock futures tumbled by nearly 2%.
Precious Metals and Oil Prices React
While stock markets faced a sharp decline, gold prices surged to an all-time high of $3,160 per ounce. Meanwhile, crude oil experienced a downturn, with benchmark Brent crude falling over 3% to $72.56 per barrel.
Asian Markets Take a Hit
Asian stock indices bore the brunt of the economic turmoil:
- Japan’s Nikkei index fell by 3.9%, reaching an eight-month low.
- South Korea’s Kospi index declined by 2%.
- Vietnam’s Van Eck ETF saw an 8% drop in after-hours trading.
- Australian stock markets slid by 2%.
- Taiwan’s markets were closed due to a public holiday.
Meanwhile, China’s yuan slipped to a two-month low in offshore trading, signaling concerns about economic instability before onshore markets opened.
Future Implications for Global Trade
The newly introduced tariffs raise concerns over an extended US-China trade war, potentially leading to further market volatility. Investors are closely monitoring further developments and their implications for global economic stability.
For more insights into how trade policies impact global finance, visit Reuters or check our latest updates on market trends.
Check out our analysis on how trade policies affect emerging markets.
Read the full market report on Reuters.
READ ALSO:
Follow the LMSINT MEDIA channel on WhatsApp:
Join Our WhatsApp Group Hear:
Kindly Share:
Discover more from LMSINT MEDIA
Subscribe to get the latest posts sent to your email.