Trump’s Tariffs Erase $12 Trillion in Global Stock Market Value
US President Donald Trump at the Oval Office on Sunday (Image credit The White House)
Trump Tariffs Stoke Recession Fear of Global Economic Instability
By S Jha
New Delhi, April 3: US President Donald Trump’s sweeping new tariffs sent shockwaves through the global economy. Estimates suggest that $12 trillion in global stock market valuation has been wiped out since Trump began taking of tariffs.
Economists are warning of an impending global recession. The decision to impose a 10% tariff on all US imports, alongside steep duties on both allies and competitors, escalated a full-scale trade war. Global equity markets dived deep on Thursday.
Asian stock markets crashed on Thursday. Japan, China, East Asian, and Indian bourses cracked.
Japan’s Nikkei index plunged to an eight-month low. The US and European stock futures also tumbled. Investors per reports rushed to safer assets like bonds and gold.
Reports said that the S&P 500 lost over $5.6 trillion in value in just six weeks. In 2024, the global stock market was valued at over $124 trillion.
Analysts warned that global stock market losses could reach $12 to $14 trillion in the coming months. The rising household costs, estimated at $1000 annually, may push inflation higher in the US per analysts.
Conventionally, a tariff is a tax on imported goods. This is ultimately paid by domestic companies, not the foreign exporters.
As a result, businesses either pass these costs onto consumers or absorb them, cutting into their profits. Analysts warn that tariffs will “increase costs for consumers, adding thousands of dollars to the average American household’s annual expenses”.
There is also a risk on jobs in the US due to costly imported raw materials and products becoming more expensive. Slow economic growth may potentially push the US into a downturn.
A Marquette University Law School poll released on April 2 found that only 28% of Americans, across political lines, believe tariffs will benefit the economy.
Amid expected retaliation with tariffs on US goods, the global economic instability could spur unpredictable trade war in modern history, warned analysts.
It is also being stated that no nation will emerge unscathed. American consumers may have to cushion higher financial burden.
Analysts are also wary of the pitfalls of the US and China trade war. The consequent global supply chains’ disruption is not ruled out.
Experts also warn of risk-off sentiment gripping investor, who may be wary of stock market volatility. A cascading effect in East Asia, which is largely export-driven economies, may further deteriorate the sentiments in equity markets.
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