US stocks have recovered slightly, despite global markets being shaken by fears of new tariffs from President Donald Trump. His suggestion of imposing import taxes that could affect “all countries” has caused unease in Asia and Europe.
Trump is set to announce a series of tariffs on Wednesday, which he refers to as America’s “Liberation Day.” These will be added to existing taxes on steel, aluminum, cars, and all products from China. The possibility of a broader trade war has made investors nervous about the global economy.
Trump’s mixed messages about the tariffs have been unsettling. He hinted last week that some countries might get exemptions, but over the weekend, he appeared to lean toward a broader approach. “You’d start with all countries,” Trump said while speaking on Air Force One.
The UK has expressed concern about the tariffs and has not ruled out retaliatory actions. Although discussions between the UK and the US have been “constructive,” the UK’s prime minister’s spokesman has said that talks are likely to continue past Wednesday. Other regions, like the European Union and Canada, are already preparing countermeasures.
These uncertainties have caused market fluctuations and renewed fears of a possible recession in the US.
How Are Markets Reacting?
The S&P 500, an index of the largest companies in the US, has dropped nearly 10% since mid-February, making March the worst month for the index in years. The tech-heavy Nasdaq has also fallen more than 10%, its worst quarter since 2022.
US stocks opened lower on Monday but managed to stabilize. The Dow Jones closed up 1%, the S&P rose 0.5%, and the Nasdaq dipped just 0.1%.
Earlier in the day, Japan’s Nikkei 225 index fell more than 4%, and South Korea’s Kospi dropped 3%. In Europe, the UK’s FTSE 100, Germany’s DAX, and France’s CAC 40 all saw declines.
Gold, often considered a safe investment during economic uncertainty, hit a record high of $3,128.06 an ounce.
Shanti Kelemen, chief investment officer at M&G Wealth, told the BBC that the uncertainty surrounding the tariffs could last a while. She highlighted that Japan, a major exporter, might be particularly vulnerable due to its large presence in the automotive and semiconductor markets, which could be targeted by new tariffs.
Why Is Trump Using Tariffs?
Trump views tariffs—taxes on imports—as a tool to negotiate better trade deals, protect US industries from unfair competition, and raise revenue. A White House report claims that a 10% tariff on all imports could create nearly three million jobs in the US.
Trump’s trade adviser, Peter Navarro, estimated that the planned tariffs could generate $600 billion annually—about one-fifth of the value of all goods imported into the US.
However, many companies expect the cost of these tariffs to be passed on to consumers in the form of higher prices, which could reduce sales and increase inflation—something Trump promised to address during his campaign. On the other hand, if businesses absorb the costs, their profits could suffer.
Business Concerns
Will Butler-Adams, CEO of Brompton Bicycle, which relies on the US for 10% of its sales, expressed concern about the potential impact of tariffs. Although Brompton’s bikes aren’t yet affected, Butler-Adams said tariffs would make the company’s products less competitive and could lead to reduced investments in the US.
“We won’t continue to invest as we do now,” he said. “We may even shrink, or in the worst-case scenario, pull out.”
Butler-Adams also noted the confusion around existing tariffs, especially when it comes to tracking how much steel in each product comes from outside the US, complicating the process for importers.
TikTok Sale Update
In a separate development, Trump mentioned that a deal for TikTok’s Chinese owner, ByteDance, to sell the app would be finalized before the upcoming deadline. Trump had set a deadline of April 5 for TikTok to find a non-Chinese buyer or face a ban in the US over national security concerns.
