Global markets experienced a downturn on Tuesday following the implementation of new tariffs by U.S. President Donald Trump. In response to Washington's tariff increase of 20% on Chinese goods, China retaliated by imposing higher duties of up to 15% on U.S. farm exports. European shares were mostly lower, with Germany's DAX slipping 1.8%, Paris' CAC 40 declining 1.1%, and Britain's FTSE 100 losing 0.4%.
Asian markets also saw declines, with Tokyo's Nikkei 225 dropping 1.2%, Hong Kong's Hang Seng losing 0.4%, and South Korea's Kospi giving up 0.2%. The Shanghai Composite index edged slightly higher by 0.2%.
On Monday, the S&P 500 fell 1.8% after Trump indicated that there was no room for further negotiations to lower tariffs on imports from Canada and Mexico. The Dow dropped 1.5%, and the Nasdaq composite slumped 2.6% in response to the escalating trade tensions.
China's announcement of tariffs on American agricultural products such as beef, corn, and soy further intensified concerns over the impact of the trade dispute. Market analysts expressed skepticism about China's future purchases of U.S. farm goods, suggesting that South America might benefit from the shift in trade patterns.
The market's recent volatility has been exacerbated by weaker-than-expected economic reports, including a slowdown in U.S. manufacturing activity and growing pessimism among households regarding inflation due to tariff threats. The uncertainty surrounding trade policies has led to a decline in investor confidence, with the S&P 500's gains since Election Day narrowing to just over 1% from a peak of more than 6%.
In addition to the trade tensions, concerns about rising prices and the impact of tariffs on businesses have contributed to the market's downturn. Companies like Nvidia and Tesla have been particularly affected, with Nvidia's stock falling 8.8% and Tesla's dropping 2.8%.
Meanwhile, oil prices also experienced a decline, with U.S. benchmark crude losing 93 cents to $67.44 per barrel and Brent crude giving up $1.10 to $70.52 per barrel. The U.S. dollar weakened against the Japanese yen but strengthened against the euro.
Bitcoin prices fell by 8.7% to approximately $83,900, reflecting the broader market uncertainty and risk aversion among investors.
