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

US officials signaled they would not back down on the tariffs that have shaken the markets, leading to sharp declines in stocks. President Donald Trump stated that investors would have to accept the effects of taxes and that the US would not reach an agreement with China until the deficit in foreign trade is resolved. China mentioned that the impact of its retaliation against the increased US tariffs was clearly visible in the markets. Meanwhile, trade ministers from the European Union will meet in Luxembourg today to discuss how to respond to Trump’s tariff package.

Investors had thought that Trump might reconsider the tariff increases due to the trillions of dollars lost in asset prices and potential harm to the economy. Trump remarked on the market drop, saying, “I don’t want anything to go off the rails, but sometimes you need to take medicine to fix something.” On the other hand, there has been an increase in reactions to Trump’s tariff strategy from the American business world. Billionaire investor Bill Ackman argued that Trump’s tariff strategy was steering the country into an economic nuclear winter. Ackman noted that voters did not sign up for such a scenario.

Futures in US and European stock markets experienced losses exceeding 3%. Japan’s Nikkei index dropped by 7.29%, hitting its lowest level since 2023. South Korea’s KOSPI index fell by 5.24%. The MSCI index tracking Asia-Pacific markets outside Japan dropped by 7.68%, marking its steepest decline in 16 years. While waiting to see whether China will announce new support measures in response to US tariffs, the CSI 300 index tracking leading shares fell by 6.31%. Losses in the Australian stock market reached 10%.

Investors perceived an increased risk of recession due to tariffs, expecting the US Federal Reserve to initiate interest rate cuts from May onwards. According to futures, five interest rate cuts of 25 basis points each are priced into the US markets this year, leading to a decrease in the returns of Treasury bonds and the US dollar. Following investors’ shift towards assets considered safe havens, the yield of US Treasury bonds dipped by 8 basis points to 3.916%.