Asian stock markets fell sharply after U.S. President Donald Trump confirmed that new tariffs would impact every major trade partner. The president is set to announce a broad package of import duties on Wednesday, calling it “Liberation Day.” These new tariffs will expand existing taxes on cars, steel, and aluminum, as well as all imports from China.

Speaking to reporters aboard Air Force One, Trump made it clear that these tariffs would apply to all countries, not just those with large trade deficits with the U.S. He insisted that the United States had been too generous in past trade deals and needed to take action.

His decision has sparked global concern, with key allies scrambling to negotiate exemptions. The United Kingdom is in active talks with Washington to avoid being affected by the tariffs. British Prime Minister Keir Starmer spoke with Trump over the phone on Sunday, with Downing Street calling the conversation “productive.” However, time is running out, as the tariffs are set to take effect in just two days.

Global Response Builds as Countries Prepare Countermeasures

Governments worldwide are responding to Trump’s aggressive trade policies. The European Union and Canada have started drafting countermeasures to retaliate if the U.S. follows through on its plan. On Saturday, sources inside the UK government warned that Britain would impose its own tariffs if it fails to secure an exemption.

Kevin Hassett, head of the National Economic Council, stated that the tariffs would mainly target 10–15 countries with significant trade deficits. However, he declined to name the nations that would face the highest import duties.

Trump defended the move, arguing that tariffs would protect U.S. businesses from unfair global competition. His economic team believes the policy will strengthen America’s negotiating position in future trade agreements.

Yet, fears of a trade war are spreading, with financial markets reacting negatively. Investors worry that the tariffs could slow economic growth and push the U.S. toward a recession.

Stock Markets Plummet as Fears of a Trade War Grow

Stock markets across Asia experienced sharp declines following Trump’s announcement. Japan’s Nikkei 225 closed 4% lower, while South Korea’s Kospi index dropped by 3%. Australia’s ASX 200 lost 1.7%, and Hong Kong’s Hang Seng fell 1.2% during afternoon trading. The market reaction highlights growing uncertainty over how global trade will be affected.

Market analysts warn that businesses reliant on global supply chains will face significant disruptions. Many companies depend on imported materials and components, meaning they could be forced to raise prices or absorb losses.

Trump’s Advisers Defend Tariffs as a Job Creator

Despite growing concerns, Trump’s advisers have defended the policy, claiming it will bring economic benefits to the U.S. economy.

Trade adviser Peter Navarro stated that a tax on car imports alone could generate $100 billion in revenue each year. He predicted that the full package of tariffs could raise as much as $600 billion—around 20% of all goods imported into the U.S.

A White House fact sheet claims that a 10% import duty could create nearly three million American jobs. The administration argues that by discouraging imports, domestic businesses will have more room to grow.

However, critics warn that the policy could backfire. If businesses pass higher costs on to consumers, inflation could rise, reducing purchasing power. On the other hand, if companies absorb the extra costs, their profits may suffer, leading to cuts in future investment and hiring.

Businesses Express Concerns Over Trade Uncertainty

Many business leaders are worried about how tariffs will affect their operations. Will Butler-Adams, CEO of Brompton Bicycle, said that uncertainty over U.S. trade rules is already causing disruption.

Brompton, which makes high-end folding bicycles, currently faces no direct tariffs. However, Butler-Adams noted that U.S. officials have raised questions about foreign steel content in Brompton’s products. The lack of clear guidelines has made it difficult for companies to plan ahead.

Brompton recently expanded its U.S. operations, increasing its workforce from four to 40 employees and opening stores in New York and Washington. However, Butler-Adams warned that tariffs could make it difficult to stay competitive.

“If tariffs raise our costs, we’ll struggle to compete,” he said. “We might have to cut investments or even leave the U.S. market entirely.”

TikTok Faces Deadline as Trade Tensions Rise

In a separate development, Trump confirmed that ByteDance, the Chinese parent company of TikTok, must finalize the sale of its U.S. operations by April 5. The order was originally issued in January as part of a Biden-era national security law. If ByteDance fails to sell TikTok by the deadline, the platform will be banned in the U.S.

The sale of TikTok has been a point of tension between Washington and Beijing. The Chinese government has repeatedly criticized U.S. efforts to force the sale, calling them politically motivated. Some analysts believe the TikTok dispute is part of a larger trade battle between the two countries.

Is a Trade War Inevitable?

With the tariff deadline approaching, tensions between the U.S. and its trade partners are reaching new heights. Many experts fear that if major economies retaliate, a full-blown trade war could follow.

While Trump and his advisers believe the tariffs will strengthen the U.S. economy, businesses and global leaders remain deeply concerned about the consequences. With financial markets reacting negatively and businesses voicing doubts, the coming days will be critical in determining how the global economy responds to this latest escalation.