(3 Minutes Read)
Global stock markets have continued to decline following China’s retaliation against U.S. import taxes with its tariffs. The major U.S. indexes opened nearly 3% lower, while European markets fell about 4%, with some companies experiencing double-digit declines in share prices. These drops add to significant losses from Thursday as investors reacted to the uncertainty caused by U.S. tariffs, raising concerns that these measures will drive up prices and hinder economic growth both domestically and internationally. South African stocks fell 3.4% in Johannesburg, the biggest one-day drop since April 2022.
President Donald Trump’s announcement of new tariffs led to a major sell-off in global markets, marking the worst trading day for U.S. stocks since the onset of the COVID-19 pandemic in 2020. Despite this, Trump expressed optimism, stating, “The markets are going to boom.” However, on Friday, markets continued their downward trend, exacerbated by China’s decision to impose a 34% tariff on all U.S. goods starting April 10. In London, shares of Barclays and NatWest dropped over 8%, while mining company Glencore fell by more than 9%, and Rolls-Royce also saw a similar decline. Russ Mould, investment director at AJ Bell, noted that relentless selling persisted despite investor hopes for a turnaround. The Dow fell more than 1,400 points, or 3.5%, and the broader S&P 500 was 4.1% lower. The tech-heavy Nasdaq Composite was 4.5% lower.
Investors flocked to safe-haven assets like gold and government bonds. Gold prices rose above USD 3,121 an ounce, nearing record highs, while bond yields decreased, according to Trading Economics.
China, under significant pressure to respond to U.S. tariffs of 54% on most goods, has demonstrated that its economy is robust enough to take such actions. However, smaller economies are adopting a more cautious approach. Leah Fahy, a China economist at Capital Economics, remarked that China’s aggressive response makes a near-term resolution to the trade conflict between the two nations unlikely.
The dollar indices, which measure the U.S. currency against six others, dropped 1.9% on Thursday—the steepest decline since November 2022—but stabilized with a 0.35% increase on Friday. Oil prices also plummeted, with Brent crude dropping over 6% to USD 65.35 a barrel as fears grew that tariffs would slow economic growth and escalate trade disputes.
Read Also;
https://trendsnafrica.com/decoding-trumps-liberation-day-tariffs-an-impact-analysis-on-africa/
Kristalina Georgieva, managing director of the International Monetary Fund (IMF), highlighted the tariffs as a significant risk to the global economic outlook amid sluggish growth. She emphasized the need to carefully assess the macroeconomic implications of these measures to prevent further damage to the global economy.
Elon Musk lost USD11 billion the day after Trump’s tariffs took effect, making him one of the hardest-hit American billionaires. Overall, the world’s 500 wealthiest individuals collectively lost $208 billion following the tariff announcement, with major losses also incurred by Meta’s Mark Zuckerberg and Amazon’s Jeff Bezos.
