The global markets continue to experience a tariff earthquake. US President Trump has not backed down from customs duties, likening the market downturn to taking medicine. Sales accelerated in Asian stock markets, with trading suspended in Japan. Expectations for a quick interest rate cut from the Fed have increased.

US officials signal they will not retreat from the customs duties that have disrupted the markets, leading to sharp declines in stocks. President Donald Trump stated that investors need to accept the effects of taxes and that he will not reach an agreement with China until the US trade deficit is resolved. China noted the impact of its retaliatory actions on the increased US tariffs in the markets. EU trade ministers will meet in Luxembourg today to discuss how to react to Trump’s tariff package.

Investors had speculated about Trump reconsidering the tariff increase due to the trillions of dollars in asset losses and potential damage to the economy. Regarding the market downturn, Trump commented, “I don’t want anything to go bad, but sometimes you need to take medicine to fix something.” On the other hand, there has been increasing backlash from the American business community towards Trump. Billionaire investor Bill Ackman argued that Trump’s tariff strategy is leading the country into an economically self-destructing nuclear winter and emphasized that voters did not endorse such a scenario.

Futures in US and European stocks recorded losses exceeding 3%. Japan’s Nikkei index plummeted by 7.29%, reaching its lowest level since 2023. South Korea’s KOSPI index declined by 5.24%. The MSCI index tracking Asia-Pacific markets outside Japan fell by 7.68%, registering the most severe drop in 16 years. As markets await whether China will announce new support measures in response to US tariffs, the CSI 300 index tracking leading shares in China dropped by 6.31%. Losses in the Australian stock market reached 10%.

Investors have priced in an increased recession risk due to tariffs, anticipating that the US Federal Reserve will cut interest rates starting from May. Futures indicate five interest rate cuts of 25 basis points in the US this year, with Treasury yields and the dollar declining. Following investors shifting towards assets seen as safe havens, the yield on US Treasury bonds fell by 8 basis points to 3.916%.