President Donald Trump addresses the media at the White House on 30 January 2025, hours after a Black Hawk helicopter collided with an American Airlines flight near DCA Airport
Credit : Shutterstock, Joshua Sukoff
Global markets were sent reeling this week after Donald Trump doubled down on sweeping new import tariffs, warning foreign governments that they’ll need to ‘pay a lot of money’ if they want to lift the restrictions.
Speaking aboard Air Force One after a weekend of golf in Florida, the U.S. President likened the tariffs to ‘medicine’ — painful, but necessary. That comment did little to calm investors, as stock markets across Asia, Europe and the U.S. nosedived on Monday.
“I don’t want anything to go down,” Trump told reporters. “But sometimes you have to take medicine to fix something.”
Stock markets plunge worldwide after Trump’s tariff warning
The immediate fallout was brutal. Asian stocks sank, U.S. futures slumped, and global oil prices slid. In Japan, the Nikkei index hit an 18-month low, with banking shares leading the drop. Major financial institutions in Tokyo have already lost nearly a quarter of their value in just a few days.
JPMorgan now predicts U.S. GDP could shrink by 0.3 per cent this year, while Goldman Sachs sees China’s economy slowing by at least 0.7 percentage points. Both banks estimate the chance of a global recession at 60 per cent and 45 per cent, respectively.
Meanwhile, countries are scrambling to respond. Taiwan has offered to eliminate tariffs to open talks. Israel, India, and Vietnam have all signalled they’re willing to negotiate. Trump, for his part, called a phone call with Vietnam’s leader ‘very productive.’
“They want to talk,” he said, “but there’s no deal unless they pay us — every year.”
Global markets react with panic as Trump tariffs spark sell-off
The new U.S. tariffs — starting at 10 per cent across the board — are already in effect, with customs agents collecting them as of Saturday. But that’s just the beginning. More aggressive ‘reciprocal’ tariffs, ranging from 11 per cent to 50 per cent, are scheduled to hit targeted countries by Wednesday.
Some experts believe Trump is simply using tariffs as leverage, a hardball strategy to force foreign governments to the negotiating table. His top economic advisers have tried to calm markets, insisting this is a repositioning of the U.S. in global trade — not an act of aggression.
But not everyone’s buying it. Billionaire investor Bill Ackman, a Trump supporter, said the strategy risks an ‘economic nuclear war.’
And while Trump’s inner circle insists this isn’t about pressuring the Federal Reserve to cut interest rates, markets seem to think otherwise. The Reserve Bank of New Zealand is now expected to slash rates on Tuesday — potentially the first domino to fall in a year of global monetary easing.
Global markets in limbo amid tariff uncertainty
For now, businesses, politicians and economists alike are holding their breath. Is this a temporary tactic to score trade deals — or the beginning of a long-term shift in U.S. economic policy?
Either way, the world is reacting — and fast. The only certainty is that Trump’s ‘medicine’ is proving hard to swallow.
