US markets showed signs of stabilization on Monday, while stocks in Europe and Asia suffered losses, following President Trump’s threat of broad new import duties. These tariffs, which Trump described as the nation’s “Liberation Day,” mark a significant expansion of his previous trade policies. The President is expected to introduce sweeping tariffs on Wednesday, intensifying concerns about a potential trade war that could undermine global growth.

The looming tariffs come on the heels of earlier hikes on steel, aluminum, cars, and full tariffs on goods from China. However, Trump’s remarks have caused confusion and anxiety in the markets due to the unpredictability of the tariff scope. Just last week, Trump hinted at possible exemptions, but his comments over the weekend seemed to suggest a broader, more aggressive approach.

Markets React to Trump’s Tariff Threats

Trump’s inconsistent statements have significantly contributed to market volatility. At a press conference on Sunday, Trump said, “You’d begin with all countries… essentially everyone we’re discussing.” This all-encompassing rhetoric sent ripples of fear through international markets. Governments around the world have braced for a wave of retaliatory trade measures. UK officials have said they expect the country to be affected, though they remain in constructive discussions with the US. However, they stressed that these talks are unlikely to conclude within this week.

Both Canada and the European Union have made it clear that they will implement countermeasures should the US impose further tariffs. These developments have reignited fears of a global recession, as concerns over trade disruptions have unsettled investors.

Since mid-February, the S&P 500 has lost nearly 10%, making March its worst month in years. The Nasdaq has also dropped more than 10%, marking its weakest quarter since 2022. Despite the shaky start to the week, US stocks managed to stabilize slightly. The Dow Jones Industrial Average climbed 1%, the S&P 500 rose by 0.5%, and the Nasdaq slipped just 0.1%.

Global Stock Market Decline

While the US markets showed signs of recovery, global stock markets have not fared as well. In Asia, Japan’s Nikkei 225 closed 4% lower, while South Korea’s Kospi index fell 3%. European markets were also under pressure, with the UK’s FTSE 100 losing nearly 0.9%. Germany’s DAX dropped 1.3%, and France’s CAC 40 declined by 1.6%. These declines are a clear reflection of growing concerns about the economic fallout from Trump’s tariff plans.

Amid these global declines, gold surged to a record high of $3,128.06 per ounce, as investors sought safe-haven assets in light of the rising uncertainty. Shanti Kelemen from M&G Wealth noted that the ongoing market instability is exacerbated by the uncertainty surrounding Trump’s tariff policy. “Japan, as a major exporter, faces significant risks from potential new restrictions,” Kelemen explained. “They dominate car exports and semiconductors, which have not yet been targeted but may be in the future.”

Businesses Express Concerns Over Higher Costs and Inflation

While President Trump views tariffs as a means of boosting jobs, raising revenue, and protecting American industries from unfair competition, businesses are voicing concerns over the potential economic consequences. The White House has argued that a 10% import tax could create nearly three million jobs in the US. Additionally, Trump adviser Peter Navarro claimed that the full set of tariffs could generate as much as $600 billion in revenue each year, roughly 20% of America’s total annual imports.

However, businesses worry that they will be forced to pass these new costs onto consumers, resulting in lower demand and higher inflation. Trump had pledged during his campaign to curb inflation, making this outcome politically sensitive for the administration. If companies choose to absorb the costs instead, it would lead to lower earnings and reduced profitability.

Will Butler-Adams, CEO of Brompton Bicycle, a company that relies on the US for 10% of its sales, expressed concern about the potential impact of the tariffs. While his bikes are not taxed yet, he worries that his company’s competitiveness will be hurt if the tariffs are applied. “If things change, we’ll invest less,” Butler-Adams said. “In a worst-case scenario, we might leave the US.” He also highlighted the confusion surrounding the complex rules on sourcing, noting that even customs staff have trouble applying the tariffs effectively.

The TikTok Deadline Looms

In addition to trade issues, President Trump is also preparing for a deadline this week regarding TikTok’s ownership. The US government has set a deadline of April 5 for ByteDance, the Chinese company that owns TikTok, to finalize the sale of the app to a US company. If ByteDance does not comply, TikTok could face a ban in the United States due to security concerns over the app’s data practices. This deadline was set under a law passed during the Biden administration, although enforcement of the law was delayed.

Global Trade War Fears Grow

As the US prepares to roll out these new tariffs, the world watches with growing concern. Trade wars have historically led to economic slowdowns, hurting global growth and creating volatility in the financial markets. As the US continues to push its aggressive trade agenda, the potential for a larger, more sustained trade war with its global partners seems increasingly likely. The next few days will be crucial as nations prepare for possible retaliation, and as businesses brace for the economic impacts of these sweeping changes.