Global Markets on Edge: Trump’s Tariffs Spark Fears of ‘Black Monday 2.0’

A New Trade War Begins

Former US resident Donald Trump has once again shaken global markets by introducing reciprocal tariffs, starting at 10% and rising to 26% on select countries from April 9. This has sparked fears of another Black Monday, referencing the 1987 Wall Street crash.

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China Hits Back, But Stocks Tumble

China quickly retaliated with 34% tariffs on all US goods. But this move failed to calm its markets. On April 7:

• Hong Kong's Hang Seng Index fell 10.37%
• China's CSI 300 dropped 6.31%

A fund manager called it an "ugly start", predicting more turbulence ahead. Economists estimate the tariffs could reduce China's GDP growth by 2%, though Beijing plans to offset this with stimulus and new trade partnerships.

India's Calm Response

India, on the other hand, chose not to retaliate. Facing a 26% U.S. tariff, Indian officials are exploring trade talks instead of U.S. measures.

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India hopes to benefit by being one of the first Asian nations to open trade negotiations with the U.S., possibly gaining a better position than countries like China or Vietnam.

Japan, South Korea, and Taiwan: Quiet But Strategic

Japan acknowledged that reversing tariffs will take time. Prime Minister Shigeru Ishiba said the government will support affected industries and protect jobs.

South Korea plans to prepare support measures for key sectors and is studying the macroeconomic impact.

Taiwan chose not to impose new tariffs. Instead, it discusses zero-tariff trade deals with the U.S., especially for electronics and energy exports.

Indian Stock Market Bleeds

Indian investors felt the shock on April 7:

• Nifty 50 opened 1,146 points down (5%) at 21,758
• Sensex plunged 5.19% to 71,449

This was the biggest single-day fall since March 2020, driven by fears of trade disruption and global uncertainty.

Global Impact Looms Large

What It Means for India

Despite the short-term pain, India's decision to avoid a tariff war may pay off in the long run. With China facing setbacks, Indian exporters in pharma, electronics, and toys exporters could find new opportunities.

The SA is playing the long game—focusing on dialogue, not disruption.

Also Read: China Strikes Back with 34% Tax on US Goods Amid Escalating Trade War.