Trump’s tariffs spark fears of US recession, causing global markets to plunge, with ASX200 down $38bn.

In Short

Global markets are in turmoil due to US President Trump’s tariff policy, causing significant losses and heightened recession fears.

Concerns about escalating trade tensions and their impact on the global economy are growing, with experts warning of potential long-term effects on markets and Australian exports.

Global markets are in turmoil following a report on US President Donald Trump’s tariff policy, leading to significant losses and fears of a recession.

The ASX 200 fell by $38 billion on Monday, down 1.6 per cent at lunchtime, influenced by a 2 per cent decline on Wall Street’s S&P 500 index.

Goldman Sachs has raised the probability of a US recession from 20 per cent to 35 per cent, which has alarmed investors worldwide. IG market analyst Tony Sycamore noted that the report had a considerable negative impact on market shares.

Tariff plan

Concerns are escalating as the US prepares for ‘liberation day’ and a reciprocal tariff plan expected on April 2, targeting all nations, not just those with significant trade imbalances with the US.

So far, tariffs have been imposed on aluminium, steel, and automotive goods, with further tariffs on Canada and Mexico starting soon. AMP chief economist Shane Oliver highlighted that increased tariff tensions contribute to global economic uncertainty.

He indicated that $23.9 billion worth of Australian exports could be affected by Trump’s tariffs, raising concerns about potential long-term impacts if a trade war escalates.

Sycamore warned that current market corrections could worsen, speculating a potential decline of 25 to 35 per cent if a recession occurs, amplifying pressure on share prices. The global economic landscape increasingly appears uncertain as President Trump’s policies unfold.