TRUMP'S RECIPROCAL TARIFFS SPARK GLOBAL SELLOFF AMID RECESSION FEARS

BEIJING, April 3 (Bernama-Xinhua) -- Asian stocks and major US and European stock index futures tumbled Thursday morning following US President Donald Trump's announcement of reciprocal global tariffs, fueling mounting fears of a trade war that could push the world into recession, reported Xinhua.

Speaking in the White House Rose Garden, Trump said Wednesday that he would impose a 10 per cent "minimum baseline tariff" on all imports and held up a chart showing higher duties on some of the country's biggest trading partners, including 20 per cent on the European Union, 24 per cent on Japan, 34 per cent on China and 49 per cent on Cambodia.

The impact was felt across global markets as investors digested the news overnight.

By 6:35 pm Eastern Time on Wednesday (2235 GMT), futures for the Dow Jones, S&P 500 and Nasdaq had fallen by 2.43 per cent, 3.6 per cent and 4.35 per cent, respectively.

Crude futures also fell over 2.5 per cent, and cryptocurrency prices took a hit, with Bitcoin dropping below US$83,000 after the announcement of the US tariffs.

Meanwhile, gold hit a record high above US$3,160 an ounce as investors flocked to safe-haven assets.

Japan's benchmark Nikkei 225 index tumbled as much as 4.6 per cent shortly after opening to an eight-month low of 34,102.00, with analysts warning of further pressure as a stronger yen, driven by safe-haven demand, threatened to weigh on exports.

The benchmark Korea Composite Stock Price Index started the session nearly 3 per cent lower.

While investors had been bracing for these tariffs over the past week, Washington's latest punitive measures turned out to be more aggressive than expected.

"The tariffs announced are at the extreme end of forecasts," Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua. "Hard to see the US avoiding a recession. World growth will be down 1 per cent or more," he said.

Despite Trump's claim that higher tariffs would help bring in revenue for the government and revitalise US manufacturing, economists have warned that such measures will push up prices for US consumers and businesses, disrupt global trade and hurt the global economy.

“The move was a significant escalation of Mr. Trump's trade fight and is likely to ripple through the global economy, driving up prices for American consumers and manufacturers while inciting retaliation from other nations," The New York Times reported. 

--BERNAMA-XINHUA