Stock markets around the world continued to fall on Wednesday as President Trump’s latest round of tariffs, including a 104% levy on Chinese goods, went into effect. In Europe, markets opened with sharp downturns. Share prices fell again in London, Frankfurt, and Paris after a brief recovery earlier this week.
The French and German markets remain almost 12 percent lower than they were last week, when the new tariffs were announced. Earlier, markets across Asia had also slumped. Japan’s Nikkei closed down nearly 4%, South Korea’s KOSPI fell 1.74%, and Taiwan’s composite index shed 5.79%.
Hong Kong’s benchmark Hang Seng Index opened down more than 3% before recovering to close up about 1%. In mainland China, key indexes closed up more than 1%, despite the steep new levy. The tariffs are a response to Beijing’s reciprocal tariffs of 34% on American goods issued last week.
These measures have intensified the global trade war, further unsettling investors who had hoped the tariffs might be a temporary negotiating tactic. China’s foreign ministry warned that it is ready to respond.
Global stock markets hit hard
“We will not let anyone take away the Chinese people’s legitimate right to development,” spokesperson Lin Jian said. Though Beijing has not announced a second round of retaliatory tariffs on U.S. goods, hopes had risen among some investors that the U.S. would eventually negotiate lower tariffs. While Trump has signaled he is willing to talk, analysts remain cautious.
Japan, the country with the largest foreign direct investment in the United States, has negotiators scheduled to hold talks in Washington. Discussions may include foreign currency exchange rates, as Trump has accused Tokyo of devaluing the yen to support Japanese exports—an accusation Japan has denied. Trade negotiators from South Korea will also begin talks with the U.S., as Seoul announces emergency actions, including subsidies and tax breaks, to support its export sectors.
Meanwhile, the deputy prime minister of Vietnam will meet with Treasury Secretary Scott Bessent to discuss the 46% tariffs placed on its exports to the U.S.
India announced it is engaging with the United States, with its external affairs minister stating that a bilateral trade agreement could be concluded by fall. Fears of a U.S. and global recession have been exacerbated by the continued plunge of America’s largest stock market, the S&P 500, which has seen its steepest descent in seven decades. Government bonds, traditionally considered safer than equities, have also plummeted.
President Trump has described the tariffs as “permanent” while also boasting that global leaders have requested trade negotiations. The U.S.-based investment bank JP Morgan now estimates a 60% chance that the world could enter a recession by the end of 2025.
