Global markets under selling pressure after Trump unveils reciprocal tariffs

ISTANBUL

Global markets came under pressure on Wednesday following US President Donald Trump’s announcement of reciprocal tariffs, as Washington’s protectionist trade policies impact the world economy.

Reciprocal tariffs ranging from 10% to 50% were imposed on products that the US imports from many of its trading partners.

The EU received 20%, China 34%, Vietnam 46%, Taiwan 32%, Japan 24%, India 26%, South Korea 25%, Thailand 36%, Switzerland 31%, Indonesia 32%, Malaysia 24%, Cambodia 49%, South Africa 30%, Bangladesh 30%, and Israel 17% in reciprocal tariffs.

Some countries, such as Türkiye, the UK, Brazil, Australia, the United Arab Emirates, New Zealand, Egypt, and Saudi Arabia were subjected to 10% reciprocal tariffs each.

US Treasury Secretary Scott Bessent advised countries not to retaliate against these reciprocal tariffs as higher rates may be in order.

Analysts say many countries that were targeted by these reciprocal tariffs are expected to retaliate, while risk perception stays high amid deepening trade war concerns.

Following Trump’s announcement, demand for safe-haven assets surged while a selling pressure in the global markets came to the fore.

The US 10-Year Treasury bond declined by 13 basis points to 4.07% while gold continued its upward trend, hitting a record high at $3,167.86 per ounce. The ounce price of gold is currently trading at $3,132 on a flat course.

The US dollar index fell 0.2% to 103.1 and the Brent crude oil decreased 0.8% to $73 per barrel.

The New York Stock Exchange closed prior to Trump’s reciprocal tariff announcement. The S&P 500 climbed 0.67%, the Nasdaq 0.87%, and the Dow Jones 0.56% on Wednesday.

American index futures started Thursday on a sharp decline.

European stock markets were impacted by Trump’s tariffs, as the EU Commission President Ursula von der Leyen called these “a major blow to the world economy.”

“I deeply regret this choice,” she said on Wednesday at a news conference. “That is why, from the outset, we have always been ready to negotiate with the US, to remove any remaining barriers to Transatlantic trade. At the same time, we are prepared to respond.”

Analysts say that the EU still prioritizes a dialogue-based solution strategy to these tariffs, noting that some trade regulations against Washington may be put forward if the desired results are not met through this approach.

All eyes turn to the Producer Price Index and European Central Bank meeting minutes to be released in the eurozone on Thursday to give direction to investors.

The DAX 40 fell 0.66%, the CAC 40 0.22%, the FTSE 100 0.3%, and the FTSE MIB 30 0.27% on Wednesday, while starting Thursday on a negative course.

Meanwhile, Asian stock markets were also in the red on Wednesday due to Trump’s reciprocal tariff announcement.

The Chinese Commerce Ministry urged Washington to lift the reciprocal tariffs on Beijing, saying that China “will resolutely adopt countermeasures to safeguard its rights and interests,” according to a news report by the state-run Xinhua News Agency on Thursday.

“History shows that increasing tariffs cannot solve the United States' own problems. It harms U.S. interests and endangers global economic development as well as industrial and supply chain stability,” the report said, citing a ministry spokesperson.

At the same time, Japan’s Purchasing Managers’ Index (PMI) for March came in above estimates at 50 and its composite PMI was 48.9, while China’s Caixin services PMI for the month was realized at 51.9 and its composite PMI reached 51.8.

The Nikkei 225 fell 3%, the Kospi Index 0.8%, the Shanghai Composite Index 0.4%, and the Hang Seng Index 1.8%, while Türkiye's BIST 100 declined 1.41% on Wednesday.