Asian Markets Dive as Trump’s Global Tariff Crisis Worsens

Asian markets took a sharp nosedive on Monday, amplifying a global stock market rout sparked by US President Donald Trump’s escalating trade war.

In Japan, the Nikkei 225 plummeted over 8% right after the opening bell, dipping below the critical 33,000 mark for the first time since August 2024. The broader Topix index fared similarly, sliding more than 7.5%, though it managed to recover slightly from its steepest losses.

Japanese Prime Minister Shigeru Ishiba addressed the crisis, reaffirming that his government will continue urging Trump to reduce tariffs on Japan. However, he acknowledged that meaningful progress wouldn’t be immediate. “The government must do everything possible to mitigate the economic fallout,” Ishiba told parliament, emphasizing support for local businesses and job protection.

Trump’s latest move is a 24% tariff on Japanese imports, which is set to take effect later this week despite Japan being a key US ally under their defense treaty.

Meanwhile, the global ripple effect from the trade war has intensified, with Asian markets mirroring the worst two-day slump on Wall Street in five years. US stock futures tanked on Sunday evening after two days of heavy losses, which have already wiped out over $5.4 trillion in market value.

Trump’s sweeping tariff policies, which began taking effect over the weekend, have triggered strong pushback from global investors. The US’s newly imposed tariffs have been met with retaliatory action from China, which slapped a 34% tariff on all US goods on Friday, further stoking fears of a full-blown, destructive trade conflict.

On Sunday, Trump downplayed the market turmoil, stating he didn’t intend to crash markets, though he refrained from predicting what lies ahead. “What’s going to happen with the market? I can’t tell you,” Trump remarked aboard Air Force One. “But I can tell you, our country has gotten a lot stronger, and eventually it’ll be a country like no other.”

Across Asia, the damage was widespread. South Korea’s Kospi index plunged more than 4.8%, triggering a circuit breaker designed to prevent panic selling. Taiwan’s Taiex saw a staggering drop of 9.7%, with major exporters like TSMC and Foxconn halting trading after their shares plummeted nearly 10%.

In Australia, the ASX 200 index shed as much as 6.3%, while New Zealand’s NZX 50 index followed suit with a 3.5% loss.

As US stocks brace for another round of sharp declines, analysts warn that the S&P 500 is perilously close to entering bear market territory, defined by a 20% drop from its peak. This downturn signals mounting uncertainty, not only for investors but also for the broader global economy.

The question now is how long this turmoil will last and whether Trump’s trade policies will lead to long-term economic damage or if the markets can eventually recover from the turbulence.