President Donald Trump’s decision to increase import duties on goods entering the United States has caused major shocks to global financial and stock markets. As Trump describes it, the duties he has announced against foreign countries are an important “remedy” needed to overcome the situation facing the US economy. He has also said that duties will only be eased if countries agree to pay large sums of money to the United States.
Asian markets are among those most affected by Trump’s decision. Markets in European countries are also being significantly impacted. Stock prices in European markets have fallen to levels not seen in the past 16 months. Oil prices have risen and investors are facing fears. Economists say Trump’s decision will cause global market prices to rise dramatically. They also say demand for goods will fall and the global economy will face a ‘recession’ or slowdown.
Markets in Europe and China Shaken
China and Hong Kong’s stock markets are among those experiencing major shocks from Trump’s decision. China has been forced to spend from its sovereign fund to offset these shocks. In response to the increase in import duties on goods entering the US, ministers from European Union (EU) member states are considering how to respond. An important meeting of EU finance ministers will be held on April 7 to discuss this extensively. The main aim of the meeting will be to decide on measures against the US in a way that does not weaken their economies.
Economic experts have also revealed that the US economy will slow down as a result of Trump’s decision. Goldman Sachs, one of the world’s largest investment banks, said the chance of the country’s economy slowing over the next 12 months or so has risen to 45%. JPMorgan has also warned that the US economy will decline by 0.3%.
Trump Shows No Concern
However, Trump said he has no concern about these warnings. And he has no worries about the shocks hitting global financial markets and the trillions of dollars being lost. “I don’t want anything [prices] to go down. But sometimes, you have to use these kinds of remedies to solve problems,” he said. Trump has decided to increase duties on goods imported from some countries to 50%. He said he is consulting with leaders of European and Asian countries on finding solutions to these issues. “They [country leaders] want to negotiate, but negotiations can only happen if [the US] is paid a high price every year,” he said.
While many countries are expressing concern about Trump’s decision, China, the world’s second largest economy, has taken measures against the US. And decided to increase duties on US goods. It should be noted that in addition to China, Taiwan’s stock market prices have also fallen by 10%. Additionally, stock prices in the defense sector of European markets have also experienced major shocks.
