Red alert for the markets. Donald Trump's duties are proving worse than expected and the day after the world stock markets are collapsing under the spectre of an all-out trade war. From Asia to Europe via Wall Street, all the lists are in deep red weighed down by fears of a recession . And they are burning money, lots of money. The collapse, however, does not seem to worry Donald Trump : the financial market "will boom, the country and the economy will boom". Tokyo closed the session down 2.77%.
The losses in Europe were much more significant: the Old Continent's stock markets saw 422 billion vanish with Trump's tariffs, which set duties against the European Union at 20% based on a calculation formula considered by analysts and investors to be "dubious" at the very least. Piazza Affari closed down 3.60%, while Paris and Frankfurt lost 3.31% and 3.01% respectively.
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Black Thursday also on Wall Street. The American stock markets are paying the heaviest price of the tariff war started by Trump, which risks opening - economists say - a new era of protectionism capable of dealing a hard blow to globalization . The Dow Jones loses 3.98%, the Nasdaq 5.97% after falling to -6.04%. The S&P 500 closes its worst session since the Covid crisis in 2020 and burns 2,000 billion dollars.
The "Armageddon charts", as the tables presented by Donald Trump have been called, are also sinking the dollar - which has lost all the gains made since Trump's election -, signaling how the measures announced have the potential to erode the greenback's status as the global reserve currency. Oil is not doing any better, losing 6.64%, and Bitcoin is sliding below $82,000. Gold is also down: after updating its historic record, the precious metal is down 1.21% to $3,128.40. Apple and Nike are the two big names most affected by the wave of sales that has hit Wall Street following the forecast of a significant increase in prices given their dependence on supply chains based in the countries most affected by the tariffs, such as Vietnam, China and India.
The administration has imposed tariffs of 46% on Hanoi and 26% on New Delhi. For Beijing, the reciprocal tariffs have been set at 34%, and are added to the 20% imposed at the beginning of the year, bringing the total to 54%. Cupertino lost 10% and then closed at -9.25%, Nike lost 14.47%. The first ten weeks of the Trump administration for Wall Street have been the worst under a new president since George W. Bush in 2001, at the height of the dot-com bubble. Yet bankers and investors, as well as the giants of Silicon Valley, had placed great hopes in Trump, in his deregulation and in his tax cuts during the election campaign . Now that the president shows he wants to get serious about tariffs, the trust placed in them is starting to waver in the face of fears of a new recession and possible stagflation.
The announced tariffs represent the "largest tax increase since 1968," or since the Vietnam War, and could "raise prices by 1-1.5% this year," noted JPMorgan chief economist Michael Feroli, warning that the U.S. economy is "dangerously close to sliding into recession." Fitch's warning is of the same tenor: the tariffs "significantly" increase the risk of an American recession. The World Trade Organization estimates that U.S. tariff measures "could cause global merchandise trade volumes to contract by 1% in 2025."
The White House downplays and urges to have "confidence in Trump". The Fed, on the other hand, remains on the sidelines, aware that its job is becoming more complicated. In deciding whether to keep rates unchanged or adjust them, Jerome Powell will have to separate the impact of tariffs on inflation from other factors that weigh on prices. Traders are convinced that the Fed will cut the cost of money at least four times this year to curb the spectre of recession, returning to play - together with the Bank of England and the ECB - a central role in rescuing and "saving" the world economy.
(Online Union)