- Nikkei, Kospi, ASX and Taiwan indices plunge as trade war panic grips Asia
- US futures signal further Wall Street losses; global markets lose nearly $6 trillion
- Oil prices tumble, Treasury yields drop, recession risk spikes
- Trump defends tariffs: “Sometimes you have to take medicine to fix something”
April 7, 2025 – Asian stock markets were roiled in early trading on Monday as global investors responded sharply to U.S. President Donald Trump’s intensifying trade war, which has already erased nearly $6 trillion in global market value.
Japan’s Nikkei 225 plunged 7.35%, while the broader Topix fell nearly 8%, deepening Friday’s 2.75% losses. South Korea’s Kospi dropped 4.8%, while Australia’s ASX 200 fell 6% and Taiwan’s stock index opened nearly 10% lower, signaling investor panic across the Asia-Pacific region.
This steep sell-off came as U.S. futures contracts pointed to further losses on Wall Street, with S&P 500 futures tumbling 4.31% and Nasdaq futures down 5.45% in volatile Sunday trading, compounding last week’s heavy declines.
Trillions Wiped Out, Safe Havens in Demand
Investor anxiety has soared since Trump announced sweeping new tariffs last week, triggering retaliatory measures from China and other trading partners. The uncertainty has sparked a global flight to safe havens, with yields on 10-year U.S. Treasuries falling to 3.897%, down 10 basis points.
Fed fund futures surged, now pricing in a 63% chance of a rate cut as early as May. Analysts at JPMorgan predict the Federal Reserve may lower interest rates at every meeting through January, bringing the top of the funds rate target to 3.0%.
Meanwhile, oil prices were under pressure as Brent crude dropped $2.12 to $63.46 per barrel, and U.S. crude slid $2.05 to $59.94, reflecting fears of weakened global demand amid recession concerns.
Trump Stands Firm, Downplays Market Panic
Despite the dramatic sell-off, President Trump remains unmoved. Speaking aboard Air Force One, he dismissed the idea that he was manipulating markets, reiterating that trade deficits must be addressed before striking any deals.
“Sometimes you have to take medicine to fix something,” Trump told reporters. “They’re dying to make a deal,” he claimed, referring to global leaders.
Trump’s comments did little to calm markets. Analysts now warn that prolonged trade tensions could undermine what was a stable U.S. and global economic outlook.
“The size and disruptive impact of U.S. trade policies, if sustained, would be sufficient to tip a still healthy U.S. and global expansion into recession,” said Bruce Kasman, Chief Economist at JPMorgan.
With recession risks rising and global equity markets in turmoil, investors and central banks worldwide may have to brace for deeper uncertainty in the months ahead.
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