Markets shuddered as Trump pushes the world to crisis again
On Monday, April 7, global financial markets woke up to a new reality. After Donald Trump's administration imposed harsh trade duties, a wave of panic began on the stock exchanges, which turned into a large-scale tsunami in a matter of hours.
According to the BBC, Europe opened in the red: the German DAX dropped by 7.6%, the British FTSE 100 by almost 6%, and the French CAC 40 by 7%.
A similar situation was observed in Asia. China's CSI 300 lost 9%, the Hang Seng Index hit a record 13%, and Hong Kong's tech sector plunged 15%.
"When confidence collapses, markets fall. This is the result of the US administration's disastrous tariff policy," says Australian Treasurer Jim Clammers.
Oil, cryptocurrencies and currencies are also in the red
Other sectors also fell. Brent Crude fell by more than 3%, dropping to $64 per barrel, the lowest level since April 2021. US WTI lost 2.18%, settling at $60.64 per barrel, Reuters reports.
The crypto market, albeit less dramatically, also suffered losses: Bitcoin fell by 0.8%. The US dollar slipped by 0.3%, and the yuan approached the level of December, with the prospect of even greater devaluation.
China at the epicenter of the storm
China has been hit particularly hard. Investors are fleeing the stock exchanges in Shanghai and Hong Kong in droves. The Shanghai Composite Index fell by 8.3%, the Kospi in South Korea by 4.7%, and Japan's Nikkei by 7.8%.
The Chinese equity market witnessed an unprecedented collapse, losing 13.74% of its value — the worst result in a single trading day since June 5, 1989. The crisis also affected tech giant Alibaba ($BABA), whose shares on the Hong Kong stock exchange suffered the deepest drop in its history, losing 19% in one session.
The "national team" of investors in China is trying to hold the stock markets, but the scale of the panic is forcing the People's Bank of China to depreciate the yuan to support exports.
A historic shock also hit Taiwan's stock market, which closed with a record drop of 9.7%.
In general, the situation in Asia is particularly explosive, as the region remains the world's main production base. An increase in US tariffs automatically reduces demand for exports from Vietnam, Bangladesh, and Taiwan. This could cause a wave of economic instability in the region.
Recession risk and memories of Black Monday
Analysts are already drawing pessimistic scenarios. Polymarket estimates the probability of a recession in the US at 64%. The collapse of the global market is being compared to Black Monday in 1987.
"This is more than a market correction. It is a systemic response to trade policies that are destabilizing the global economy," writes Bloomberg.
Everything indicates that the domino effect is just beginning. Investors do not see a clear plan for de-escalation, and any new statements from the White House only increase tensions.
On April 7, 2025, the Bitcoin (BTC) exchange rate dropped to below $75 thousand, the lowest level since November 2024.
Also, the price of gold updated its record and rose to $3,080 an ounce on Friday, March 28th.