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Global stock markets dive as Donald Trump's reciprocal tariffs kick in, tech hit the worst
Tech manufacturing hubs such as China and Taiwan in particular are now facing levies over 30%, bringing the total tariffs to an eye-watering 54%.
Stocks across the globe dived and investors rushed to park their money with the safety of bonds, gold and the yen on Thursday after US President Donald Trump unveiled a bigger-than-expected round of reciprocal tariffs around the world's largest economy.
For instance, the tariffs severely affected the previously high-flying tech sector in particular with manufacturing hubs China and Taiwan facing levies over 30 per cent, bringing the total tariffs to an eye-watering 54 per cent, according to a report by news agency Reuters.
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How did markets react?
As a result, Nasdaq futures tumbled by four per cent and in the after-hours trade, around $760 billion was wiped from the market value of the Magnificent Seven technology leaders.
Apple was hit the hardest since the company makes iPhones in China. Its shares were down nearly seven per cent.
S&P 500 futures also fell 3.3 per cent, FTSE futures fell 1.8 per cent, while European futures fell nearly two per cent.
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What happened in Asia?
Trump announced a baseline 10 per cent tariff on imports with even more higher levies on some Asian trading partners.
Apart from China's 34 per cent levy, Japan was taxed 24 per cent, Vietnam 46 per cent, and South Korea 25 per cent.
South Korea's Kospi ended up falling by two per cent and Van Eck's Vietnam ETF fell over eight per cent in after-hours trade. The Nikkei was down 3.9 per cent at an eight-month low in early trade in Tokyo, with almost every index member falling as shippers, banks, insurers and exporters took a beating.
In India, the markets are yet to open. At the previous close, the benchmark BSE Sensex was up by 592.93 points or 0.78 per cent, reaching 76,617.44. The broader NSE Nifty meanwhile, opened 166.65 points up or 0.72 per cent in the red, reaching 23,332.35.
Meanwhile, Australian shares fell by two per cent, and the European Union was hit with a 20 per cent levy.
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Gold hit a record high of over $3,160 an ounce, and oil, which is a proxy for global growth, slumped over three per cent to put the benchmark Brent futures at $72.56 a barrel.
"The US effective tariff rate on all imports look to be the highest level in over a century," the report quoted Citi's global rates trading strategist, Ben Wiltshire, as saying, while Jeanette Gerratty, chief economist at wealth advisory Robertson Stephens, said that “the tariffs are so comprehensive and so much larger than we expected.”
