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Stocks sink again as Trump holds firm on tariffs

By AFP - Apr 07,2025 - Last updated at Apr 07,2025

A photo shows the rate of the AEX index on a screen at Beursplein 5 in Amsterdam, on April 7, 2025 (AFP photo)

LONDON — Stock markets and oil prices collapsed further on a black Monday for markets as US President Donald Trump stood firm over his tariffs despite recession fears.

Trading floors across the globe were overcome by waves of further selling after last week's sharp losses, with Trump telling Americans to "be strong, courageous, and patient," minutes before the New York stock market opened to drops of over three per cent.

Wall Street was wracked by volatile trading, bouncing into positive territory on hopes of a 90-day pause in tariffs, only to sink lower when those were dashed by the White House.

Hong Kong collapsed by 13.2 per cent, in its worst day in nearly three decades.

Trillions of dollars have been wiped off combined stock market valuations in recent sessions.

Taipei stocks suffered their worst fall on record Monday, tanking 9.7 per cent.

Tokyo closed down by almost eight per cent.

Frankfurt fell as much as 10 per cent in early trading before paring back losses to end the day down 4.1 per cent.

Bitcoin tumbled, while the dollar rebounded after sharp losses last week.

"The carnage in global equity markets has continued," said Thomas Mathews, Asia Pacific head of markets at Capital Economics.

A 10-per cent "baseline" tariff on imports from around the world took effect Saturday.

A slew of countries will be hit by higher duties from Wednesday, with levies of 34 per cent for Chinese goods and 20 per cent for EU products.

Beijing last week announced its own 34-per cent tariff on US goods, which will come into effect on Thursday.

Trump on Monday threatened to slap an additional 50-per cent tariff on China if Beijing did not withdraw its retaliation plans -- heightening the prospect of another round of tit-for-tat hikes.

Bitter medicine 

Hopes that the US president would rethink his policy in light of the turmoil were dashed on Sunday when he said he would not make a deal with other countries unless trade deficits were solved.

 

"Sometimes you have to take medicine to fix something," he said of the ructions that have wiped trillions of dollars off company valuations, which impacts the retirement savings of a large number of Americans.

On Monday, Trump told Americans "Don't be Weak! Don't be Stupid!... Be Strong, Courageous, and Patient, and GREATNESS will be the result!"

In a letter to shareholders, JPMorgan Chase CEO Jamie Dimon warned that Trump's broad tariffs "will likely increase inflation".

"Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth," Dimon said, concluding that "the recent tariffs will likely increase inflation".

With the start of the first quarter earnings reports, the market is likely to get a flurry of updated outlooks by companies that could further dampen sentiment.

Monday's savage selling was across the board, with no sector spared.

Tech firms, carmakers, banks, casinos and energy firms all felt the pain as investors abandoned riskier assets.

Concerns about future energy demand saw oil prices sink as much as three per cent, having dropped some seven per cent Friday.

Both main contracts hit their lowest levels since 2021, but then cut losses.

 

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