Global Markets Tumble as Trump’s Tariffs Take Effect

Global financial markets are experiencing significant volatility and a widespread downturn as the full scale of President Donald Trump's new tariff regime becomes clear. The tariffs, implemented by executive order, have sparked a sell-off across major stock exchanges, with investors expressing concern over the potential for a global trade war and its impact on economic growth. The uncertainty has hit multiple sectors, affecting not only long-standing trading partners but also traditionally neutral nations.
The new tariffs, which went into effect on August 1st, impose a range of duties on imports from dozens of countries, with rates varying based on trade deficits and strategic alignment. The announcement has been met with a mix of disappointment and anger from international leaders. Canada, a close ally, saw its tariff rate on some goods increase to 35% from 25%, a move the Canadian Prime Minister called "disappointing." Switzerland, known for its luxury goods and pharmaceuticals, was particularly hard-hit with a 39% tariff, a figure higher than initially threatened.
The market reaction has been immediate and severe. In Asia, benchmarks fell, with South Korea's Kospi index dropping sharply after a 15% tariff rate was set for the country. European stock markets also opened lower, with indices in Germany, France, and Spain all declining. On Wall Street, all three major indexes—the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite—opened down, a drop exacerbated by a weaker-than-expected jobs report.
The ripple effects are being felt beyond the stock market. Currency values have fluctuated, with the Swiss franc hitting a six-week low against the US dollar and the Canadian dollar on track for its seventh consecutive weekly loss. Companies, both domestic and international, are warning of rising costs that will likely be passed on to consumers. For example, a major American consumer goods company has stated it will be raising prices due to a significant tariff-related financial hit. The new tariffs have also led to speculation about retaliatory measures from affected countries, further fueling a climate of economic instability and unpredictability.
Source@BBC