A global market crash was sparked on Thursday, with Wall Street leading the way, as countries reacted to President Donald Trump’s trade war. While the White House maintained that the U.S. economy would ultimately thrive, the announcement of tariffs created a wave of turmoil in the global economy.
Markets in the U.S., Europe, and Asia took a hit following Trump’s decision, which included imposing 10% tariffs on imports from all nations and even higher tariffs on products from specific countries like China and the European Union. The S&P 500 fell by 4.8%, marking its biggest drop since 2020, while the Nasdaq dropped 6.0%, and the Dow Jones lost 4.0%. Meanwhile, Japan’s Nikkei 225 index saw a decline of 1.8% on Friday.
Trump’s tariffs also extended to a 25% duty on foreign-made cars, which prompted Canada to impose similar tariffs on U.S. goods. Stellantis, the company behind Jeep and Chrysler, halted some production in its Canadian and Mexican plants.
Despite the downturn, Trump remained unfazed, predicting that the stock market would “boom.” Vice President JD Vance also downplayed the effects, stating that the market response could have been worse. Trump believes that his economic reshaping is necessary to reduce the U.S.’s dependency on foreign manufacturers, comparing the process to a medical operation that will ultimately restore the economy.
The new tariffs include 54% on Chinese goods, 20% on European Union products, and 24% on Japan. China quickly demanded the removal of the tariffs, warning of retaliatory actions, while European leaders, including French President Emmanuel Macron, threatened to suspend investments in the U.S.
International Monetary Fund (IMF) head Kristalina Georgieva expressed concern that the tariffs posed a significant risk to global economic growth, and Ngozi Okonjo-Iweala of the World Trade Organization warned of a potential 1% contraction in global merchandise trade. Despite criticism from both domestic and international sources, Trump stood firm, saying negotiations would only occur if favorable terms were on the table. White House officials have made it clear that the U.S. is not currently engaging in talks, while Commerce Secretary Howard Lutnick backed the president’s approach, suggesting that other countries would ultimately lose in a trade battle with the U.S.
