The latest action by US President Donald Trump on the application of tariffs took Asian and US stock markets by surprise, registering steep losses and fueling rumors of a financial crisis globally. The US market plummeted at its worst during the COVID-19 pandemic, losing trillions of dollars' worth from the market with large indexes registering further decline.
Asian markets also fell, with Japan's Nikkei 225 falling almost 8% and Taiwan's Taiex falling about 10%. China's retaliatory action to impose a 34% tariff on US goods has sounded alarm bells regarding a global trade war along with existing market volatility and investor nervousness.
The heightened trade tensions and subsequent market volatility have also bred higher chances of a U.S. and world recession as economists and analysts sounded the alarm on possible economic recessions in the world. The new tariffs and retaliations are also the greatest risk to the growth of world economies and long-term impacts on world trade and investment.
