Trump's Tariff Announcement Sends Global Markets into Turmoil
Global financial markets have been thrown into disarray following former President Donald Trump's weekend announcement of a sweeping 15 percent blanket tariff. The decision, made in response to the Supreme Court striking down his signature economic policy, has triggered a frantic scramble among investors worldwide, reshaping asset valuations and market sentiment almost overnight.
Cryptocurrencies and Precious Metals React Sharply
Bitcoin experienced a dramatic selloff on Monday morning, plummeting 4.7 percent to $65,725.91. Ether followed suit, dropping approximately four percent to $1,878.80, marking a staggering 34 percent decline year-to-date. Analysts at Saxo characterized this movement as "macro-driven," indicating a broader shift away from speculative, high-risk assets rather than issues specific to digital currencies themselves.
In contrast, gold surged as a traditional safe haven, climbing 0.45 percent to $5,132.61 per ounce after briefly hitting $5,161.64, its highest level in three weeks. Silver also gained, rising 0.33 percent to $85.97. The tariff decision simultaneously weakened the US dollar, with the pound strengthening 0.4 percent to $1.353, while the euro advanced 0.3 percent to $1.18. The greenback also fell 0.3 percent against the yen in Asian trading.
Asian Markets Defy Uncertainty with Record Gains
Asian markets displayed remarkable resilience, with South Korea's Kospi and Taiwan's Taiex both reaching record highs in early trading. Investors flocked to the region to secure technology, automotive, and industrial stocks, diversifying away from the concentrated US market. The Kospi initially jumped two percent before stabilizing at a 0.65 percent gain, closing at 5,846.09 KRW, buoyed by a 5.4 percent surge in Samsung shares to 3,402.80 KRW and a 5.5 percent leap in HD Hyundai Electric to 1,067 KRW.
Taiwan's Taiex briefly crossed the 34,000 mark for the first time ever, ultimately settling at a 0.5 percent increase to NT$33,733.26. Hong Kong's Hang Seng index, returning from the Lunar New Year break, soared 2.46 percent to 27,062, while India's Sensex edged up 0.4 percent.
European and US Markets Brace for Impact
The FTSE 100 opened slightly lower, declining 0.19 percent to 10,666.97, as UK companies and investors assessed the implications of the new tariff regime. The FTSE 250 fell more sharply, slumping 0.45 percent to 23,643.72. Matt Britzman, senior equity analyst at Hargreaves Lansdown, noted that the UK had previously secured a 10 percent trade deal with the US, but the White House's 15 percent blanket tariff "rather takes the shine off that achievement," reintroducing significant trade uncertainty.
Richard Hunter, head of markets at Interactive Investor, observed that initial market reactions to the Supreme Court ruling were positive, benefiting companies like Amazon and Home Depot that might receive tariff refunds. However, sentiment has since soured, with US futures indicating losses and analysts predicting that main indices will reverse recent gains when trading resumes. The EU is already considering pausing negotiations until the new trade landscape becomes clearer, further clouding the global economic outlook.
