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Stock markets around the world have tumbled in anticipation of Donald Trump’s imminent trade war dubbed “Liberation Day.”
On Tuesday the White House announced the US President will impose tariffs, but gave no further details.
The Hang Seng Index in Hong Kong fell 8% and in China the CSI 300 Index dropped by 0.1%, whilst Asian stocks were also impacted.
South Korea’s benchmark index fell 0.6% and the Japan’s Nikkei hit its lowest level since September to 0.25%.
President Trump’s trade war could trigger a recession in major economies and worst still this could lead “to a global recession.”
Chief economist at Vanguard Asset Management Jumana Saleheen told MPs on Tuesday, “The situation which is much more worrying is if it would expand into more of a trade war, and then everybody is doing tit-for-tat strategies, then that could escalate and lead to a downturn, a recession in major economies, it could lead to a global recession.
“That is an extreme scenario. Everyone is aware of that [risk] and they don’t really want it.”
Asia-Pacific investment strategist at Legal & General Investment Management Ben Bennett said, “Nervousness is the dominant sentiment right now.
“Investors are hoping for some clarity, and perhaps the start of the deal making phase. But tariffs are already weighing on business sentiment, and this will probably feed through into lower global economic activity in the coming months.”
Managing director of investment strategy at OCBC Vasu Menon said: “Trump has called April 2 ‘Liberation Day’ but it is unlikely that investors will truly be liberated from tariff uncertainties.
“If countries retaliate, Trump could up the ante – this possibility will probably continue to keep investors nervous.”
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