World stocks dived today and investors scrambled for the safety of bonds, gold and the yen, fearing new US tariffs have intensified a trade war threatening to tip the world into recession.
European shares slumped to a two-month low this morning as a fresh round of aggressive US tariffs escalated a global trade war and stoked fears of an economic slowdown.
The Frankfurt DAX had dropped 2.5% by lunchtime, while the Paris CAC sank 2.7% and London’s FTSE index was down 1.5% after Trump hit Britain less hard than the European Union.
Stock markets in Italy and Spain fell 2.3% and 1.4%, respectively.
Dublin’s ISEQ index had lost 1.1% this morning with the banking shares all nursing losses.
Meanwhile, the dollar was swept to a six-month low after President Donald Trump imposed tariffs that raise effective import taxes to the highest levels in a century.
“This is a game-changer, not only for the US economy but for the global economy,” said Olu Sonola, head of US economic research at Fitch Ratings.
“Many countries will likely end up in a recession. You can throw most forecasts out the door if this tariff rate stays on for an extended period of time.”
Nasdaq futures dropped 3.2% and the Nikkei’s near 3% fall in Tokyo – touching eight-month lows – led heavy losses across Asia.
Apple’s market capitalisation fell by more than $240 billion as its shares slid 7% in after-hours trade. Nvidia’s market cap dropped 5.6% or $153 billion.
Donald Trump yesterday announced a baseline 10% tariff on imports with far higher levies on some trading partners, particularly in Asia.
China was hit with a 34% levy, Japan got 24%, Vietnam 46% and South Korea 25%. The European Union was hit with a 20% levy.
According to Fitch Ratings, the effective US import tax rate has shot up to 22% under Trump from just 2.5% in 2024, reaching levels last seen around 1910.
Ahead of promised countermeasures from China and Europe, investors were buying up safe havens and selling exposure to global growth.
Oil, a proxy for economic activity, dropped more than 2% to put benchmark Brent futures at $73.28 a barrel.
Australian shares and the Australian dollar fell.
Gold hit a record high above $3,160 an ounce and Japan’s yen jumped more than 1% to 147.29 per dollar as foreign exchange traders looked for safety outside the US dollar. The euro also rose against the dollar today.
China, for now, held its currency relatively steady ,containing the yuan’s drop to about 0.4% despite eye-watering total tariffs of above 50% on Chinese exports and the hit toVietnam seen as shutting down a popular work-around route.
China’s big domestic economy and the hope of support from Beijing limited losses in Hong Kong stocks to about 1.5% and in Shanghai to around 0.5%.
