Emmanuel OchayiStock markets around the world fell sharply on Monday as investors reacted to U.S. President Donald Trump’s announcement of new tariffs on Canada, China, and Mexico. The financial sector saw heavy losses, with Wall Street, European, and Asian markets suffering declines.
Trump Announces Tariffs on Key Trade Partners
On Saturday, Trump declared 25 percent tariffs on imports from Canada and Mexico, along with 10 percent duties on Chinese goods. Despite ongoing trade talks with Canada, he reaffirmed his stance, saying, “We have to protect American workers and stop unfair trade practices. These tariffs will ensure that we get the best deals for our country.”
Join our WhatsApp ChannelThe tariffs led to a steep drop in global stock markets. In early trading, Wall Street’s major indices plunged before recovering slightly after Trump postponed Mexico’s tariffs for one month. The London, Paris, and Frankfurt stock exchanges all ended the day in the red.
Trump Warns Europe May Be Next
Over the weekend, Trump hinted at targeting the European Union with tariffs, raising concerns about further economic instability. He did not rule out tariffs on British goods, saying, “We are looking at all options. We want fair trade, and if that means taking action against Europe, we will.”
Shares in European car manufacturers were among the worst affected, with Volkswagen falling 3.5 percent and Stellantis, which has factories in both Canada and Mexico, dropping more than 4.5 percent.
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Markets React as Investors Fear Economic Impact
Financial analysts warned that the tariffs could worsen global economic conditions. John Plassard, an investment specialist at Mirabaud, commented, “Investors fear that this trade war will result in a significant deterioration in the global economy.”
Daniela Sabin Hathorn, a senior market analyst at Capital.com, noted that Trump’s decision had unsettled investors. “The lack of a clear economic rationale behind this decision—justified primarily as a measure to curb illegal immigration and fentanyl imports—has made markets nervous,” she said.
Cryptocurrency markets also faced a sharp selloff, with Bitcoin dropping nearly five percent before rebounding.
Oil Prices and Currency Markets Experience Volatility
Oil prices surged initially after Trump imposed a 10 percent tariff on Canadian oil imports. However, the gains faded as the market digested the broader economic risks. The U.S. dollar fluctuated against major currencies, with the Mexican peso and Canadian dollar experiencing notable swings.
Analysts warned that the tariffs could fuel inflation and slow economic growth. Chris Beauchamp, chief market analyst at IG, explained, “Faced with these unknowns, it seems probable that richly valued U.S. stocks like the Magnificent 7 will continue to suffer losses as investors look to book gains and wait out the storm.”
Tesla, which operates a factory in Canada, saw its shares drop 4.7 percent. Apple and Nvidia also suffered losses, declining by 4.0 percent and 2.6 percent, respectively.
Trump Acknowledges Potential Economic Pain
Trump admitted that Americans might feel financial pressure from the tariffs but insisted they were necessary. “I know there might be some pain, but it will be worth the price,” he said. “We cannot continue to allow other countries to take advantage of the United States.”
In response, Canada, Mexico, and China vowed to retaliate if the tariffs take effect. Mexican officials warned that countermeasures could impact U.S. agriculture and manufacturing exports. Chinese representatives emphasized their commitment to defending their economic interests.
European Leaders Respond to Trump’s Threats
Trump’s tariff threats against Europe overshadowed a defense summit in Brussels on Monday. French President Emmanuel Macron made it clear that Europe would not sit idly by. “If we are attacked in terms of trade, Europe—as a true power—will have to stand up for itself and therefore react,” Macron said as he arrived for talks.
Stock Market Performance at a Glance
By the close of trading on Monday, global markets reflected the uncertainty:
- New York – Dow Jones: Down 0.2% at 44,462.13 points
- New York – S&P 500: Down 0.7% at 5,998.38 points
- New York – Nasdaq: Down 1.1% at 19,403.64 points
- London – FTSE 100: Down 1.0% at 8,583.56 points
- Paris – CAC 40: Down 1.2% at 7,854.92 points
- Frankfurt – DAX: Down 1.4% at 21,428.24 points
- Tokyo – Nikkei 225: Down 2.7% at 38,520.09 points
- Hong Kong – Hang Seng: Flat at 20,217.26 points
The U.S. dollar showed mixed movements:
- Euro/dollar: Down to $1.0314 from $1.0363
- Pound/dollar: Up to $1.2425 from $1.2392
- Dollar/yen: Down to 154.64 yen from 155.18 yen
- Euro/pound: Down to 83.01 pence from 83.59 pence
Oil prices also fluctuated:
- Brent Crude: Down slightly to $75.61 per barrel
- West Texas Intermediate: Up 0.3% to $72.71 per barrel
With trade tensions escalating, investors are bracing for further market volatility. Trump remains firm on his trade stance, leaving businesses and financial markets uncertain about what comes next.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
