World stock markets were in negative territory on Monday ahead of US President Donald Trump‘s so-called “Liberation Day,” or Wednesday, when the latest tariff announcements are expected.
The S&P 500 dropped 0.5% while the Nasdaq fell 1.4% as investors shunned riskier assets, with the US indices reflecting global downward trends ahead of Trump’s expected announcement.
The price of gold meanwhile reached $3,150 per ounce and was tracking towards another record high, reflecting the growing economic uncertainties and escalating trade tensions.
In Japan, the Nikkei 225 index dropped 4%, South Korea’s Kospi sank 3%, and France’s CAC 40 fell 1.5%.
What can be expected on Wednesday
It is not completely clear what the US government is planning on what Trump has dubbed “Liberation Day” but on Wednesday, the US is set to begin “reciprocal” tariffs which some economists predict could average at 15%.
Trump on Sunday warned that tariffs would include “all countries” and not just those with the largest trade imbalances with the US, compounding investor fears.
The White House has projected that tariffs for foreign goods will generate an additional $100 billion (€92.7 billion) in revenue for the US government.
Trump not ruling out possible recession
Trump said he did not discount the possibility of a recession in a Sunday interview with Fox News also likely contributed to the sharp market selloff seen on Monday.
On the question of whether he expected a recession this year, Trump said: “I hate to predict things like that. There is a period of transition because what we’re doing is very big… It takes a little time.”
The import taxes that Trump has threatened this time around eclipse the duties put in place during his first term.
Trump has placed 20% duties on imports from China and threatened to impose 25% tariffs on all imports from Canada and
Mexico.
Trump also says the US will place reciprocal tariffs on all countries that have tariffs on US exports, including Europe, India, and Japan.
Edited by: Richard Connor
