Asian Markets Suffer Setback As Trump's Tariff Barrage Reiginites Recession Jitters

Asian equities took a beating on Wednesday as renewed fears of a global recession rattled investor sentiment and dragged oil prices to their lowest point in four years. 

The sharp sell-off followed Wall Street’s deep losses and came as the US confirmed it would move forward with imposing 104 per cent tariffs on Chinese goods, escalating tensions between the two economic superpowers.

The market reaction was swift and widespread. In early Asian trading, S&P 500 futures dropped by 1.5 per cent, while Nasdaq futures declined 1.7 per cent, reported Reuters. China’s blue-chip stocks fell 1.2 per cent, and the Hang Seng index plunged 3.1 per cent. The MSCI Asia-Pacific index, excluding Japan, was down 1.7 per cent. Meanwhile, Japan’s Nikkei shed 3.5 per cent, reversing a previous 6 per cent rally spurred by speculation that Tokyo might secure a trade agreement with the US. Taiwanese stocks also declined by 1.7 per cent, despite the activation of a $15 billion stabilisation fund by the government.

Europe was not spared either, with EUROSTOXX 50 futures falling 4.5 per cent and FTSE futures losing 2.5 per cent. The S&P 500 itself  experienced one of the most dramatic turnarounds in decades—slipping 4.2 percentage points from gains to losses in a single session, erasing $5.8 trillion in market value in what is now its steepest four-day decline since its inception in the 1950s.

Also Read : Trade War Turbulence: Oil Prices Slide as US Slaps 104 Per Cent Tariffs on China

US And China Caught In A Standoff

"US and China are stuck in an unprecedented, and expensive, game of chicken, and it seems that both sides are unwilling to back down," said Ting Lu, chief China economist at Nomura. He added, "Given the extraordinarily fluid situation, it is impossible to reasonably estimate the impact of the ongoing US-China trade war on China’s economy."

Overnight, Washington confirmed that the 104 per cent tariffs on Chinese imports would take effect after midnight on Wednesday. President Donald Trump further stirred the waters by accusing Beijing of manipulating its currency, while also expressing optimism that a deal would eventually be reached.

Analysts at JPMorgan warned that the magnitude of the tariff action—effectively amounting to a $400 billion tax hike for US households and businesses—was enough to tip the global economy into recession.

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