Japan leads hefty global stock market losses on tariff woes
Pedestrians walk past an electronic board displaying the numbers on the Tokyo Stock Exchange, showing the market down over four percent in early afternoon trading, along a street in Tokyo. (Photo by Richard A. Brooks / AFP)
LONDON, United Kingdom – Global stock markets were a sea of red Monday and investors fled to gold ahead of a wave of US tariffs this week that have fueled recession fears.
Tokyo plunged more than 4 percent, leading losses across Asian and European markets, as markets extended uncertainty over President Donald Trump’s latest tariff announcements due on his “Liberation Day” on Wednesday.
READ: ‘Liberation Day’ of tariffs is coming. Here’s what it could mean for you
Adding to fears, Trump said Sunday that tariffs would include “all countries”, not just those with the largest trade imbalances with the United States.
“Trump continues to be the key reason why markets are having a bad day,” said AJ Bell investment director Russ Mould.
“He has now threatened to target all countries importing goods into the US with tariffs, further clouding economic prospects around the world,” he added.
Automakers were hit particularly hard in the wake of Trump’s announcement that he would also impose 25 percent duties on imports of all vehicles and parts.
READ: Trump announces 25% tariffs on foreign-built vehicles
In Europe, Porsche, Volkswagen and Stellantis, which owns several brands including Jeep, Peugeot and Fiat, all dropped around 3 percent.
Toyota, the world’s biggest carmarker, plunged over 3 percent, along with Nissan and Mazda.
“Within the Asia-Pacific region, the car levies will hit Japan and South Korea the hardest,” Moody’s Analytics economists wrote.
“Such a sizeable tariff hike will undermine confidence, hit production and reduce orders. Given the long and complex supply chains in car manufacturing, the impact will ripple through these countries’ economies.”
Gold, seen as a safe haven asset in times of uncertainty, hit a record high over $3,100 an ounce.
Adding to the dour mood, Wall Street sank on Friday after data showed the Federal Reserve’s preferred gauge of inflation rose more than expected last month, further denting hopes for interest rate cuts.
In company news, Zensho Holdings, which owns several Japanese restaurant franchises, plunged 3.9 percent after its beef bowl chain Sukiya said it would temporarily shut nearly all of its roughly 2,000 branches after a rat was found in a miso soup and a bug in another meal.
Hong Kong suffered another big selloff, with conglomerate CK Hutchison shedding 3.1 percent following reports billionaire Li Ka-shing might delay signing a multi-billion-dollar deal to offload its ports operations, including those in the Panama Canal.
The firm has faced criticism from China since it agreed to offload the business to a US-led consortium after pressure from Trump.
Beijing confirmed on Friday antitrust regulators will review the deal, likely preventing the parties from signing it as planned on Wednesday.
Bangkok dropped more than 1 percent as trade got back under way after being suspended on Friday following the deadly quake that hit the Thai capital.
The stock market was already under pressure, having dived more than 15 percent since the turn of the year on worries about the Thai economy.
