
Equity markets suffered a bloodbath Thursday after Donald Trump delivered a "haymaker" blow with sweeping tariffs against US partners and rivals, fanning a global trade war that many fear will spark recessions and ramp up inflation.
Tokyo's Nikkei led an Asian selloff, collapsing more than 4%, while U.S. futures plunged, safe haven gold hit a record high and the yen jumped 1% amid worries that retaliation will send the crisis spiraling.
The panic came after the U.S. president on his so-called Liberation Day unveiled a blitz of levies aimed at correcting trade deficits with other countries following what he says has been years of the United States being "ripped off".
Against a White House backdrop of U.S. flags, Trump announced that "for decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike".
Trump reserved some of the heaviest blows for what he called the "nations that treat us badly", including 34% in new levies on rival China, 20% on key ally the European Union and 24% on Japan.
A number of other countries will face specifically tailored tariff levels, and for the rest, Trump said he would impose a "baseline" tariff of 10%. Auto tariffs of 25% kicked in on Thursday.
Investors are now steeling themselves for retaliatory measures, with governments making their anger clear.
China vowed "countermeasures" and urged Washington to cancel the tariffs, while calling for dialogue. Japan said the move was "extremely regrettable" and could contravene World Trade Organization rules.
European Union chief Ursula von der Leyen called Trump's announcement a "major blow to the world economy" but vowed the bloc was "prepared to respond".
Thailand said it had a "strong plan" to handle the new U.S. measures while Canadian Prime Minister Mark Carney warned "we are going to fight these tariffs with counter measures. We are going to protect our workers".
Stephen Innes of SPI Asset Management said: "President Trump walked into the Rose Garden and detonated the most aggressive trade shock the market’s seen in decades. This isn’t a jab — it's a full-on haymaker."
Wall Street "had talked itself into a softer, more symbolic move. Instead, Trump carpet-bombed the global supply chain".
"This was a 'shock and awe' tariffs campaign, dressed up in 'reciprocity' language but designed to throttle the trade deficit through brute force."
He said the measures meant that inflation risks had surged and economic growth expectations would be cut, with the U.S. Federal Reserve "pinned between a hawkish rock and a deflationary hard place".
Tokyo pared its hefty drop slightly but remained well under pressure, while Hong Kong, Sydney, Seoul, Manila and Bangkok gave up more than 1%. There were also losses in Shanghai, Singapore, Wellington and Mumbai.
Vietnam's stock exchange dived 5% after the country was hit with levies of almost 50%.
Wall Street futures were also battered, with the Dow dropping 2.4%, the Nasdaq plunging more than 4% and the S&P 500 more than 3% off. European futures were also deep in the red.
Safe havens rallied as traders sought to dump risk assets.
Gold hit a new peak of $3,167.84 and the Japanese yen strengthened to 147.69 per dollar from 150.50 the day before.
Among other currencies, the South Korean won, Vietnamese dong, Thai baht, Malaysian ringgit and Chinese yuan all sank.
US Treasury yields sank to their lowest level in five months — yields and prices go in opposite directions.
Oil also suffered big losses, with both main contracts down more than 2% on fears that the shock to economies would hit demand.
Among the big losers on the corporate front, Japanese tech giant Sony shed 5%, while its South Korean rival Samsung was almost 3% down.
Car titan Toyota was off more than 6%, Nissan lost more than 4% and Honda was down 1.8%. Tokyo-listed tech investment firm SoftBank was off more than 3%.
And Hong Kong-listed e-commerce giants fell after Trump's removal of a duty-free exemption for small parcels from China. Sector leaders Alibaba and JD.com shed around 5%t.
Tai Hui of JP Morgan Asset Management said the scale of the measures raised concerns about growth.
"US consumers may cut back on spending due to pricier imports, and businesses might delay capital expenditures amid uncertainty about the tariffs' full impact and potential retaliation from trade partners," he wrote in a note.
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