Global financial markets experienced a sharp drop Thursday following former U.S. President Donald Trump’s plan to impose tariffs on imports from over 90 countries, sparking fears of renewed trade wars and global economic instability.
At a televised rally in Florida, Trump made his surprise announcement regarding his economic agenda ahead of the 2026 US presidential election. Citing what he termed as decades of unfair trade deals, he pledged blanket tariffs ranging from 10%-60% on products imported from countries that have taken advantage of U.S. markets.
“America has long been used as the world’s bank account,” Donald Trump stated to supporters. “Now is the time for action: jobs back home, balancing trade deficits, and holding these countries to account.”
This statement sent shockwaves through financial markets. At opening bell, the Dow Jones Industrial Average dropped more than 780 points while both S&P 500 and Nasdaq suffered over three percent drops – marking one of their worst single-day drops since 2025.
Asian and European markets mirrored this selloff; Japan’s Nikkei 225 dropped 3.2%; Germany’s DAX lost 2.6% and UK’s FTSE 100 dropped 2.1%; emerging market currencies like Indian rupee, Brazilian real, and Turkish lira also took significant hits against the U.S. dollar.
Investors are now bracing themselves for potential retaliatory measures from some of the world’s largest economies, including China, the European Union, Canada, Mexico and South Korea–many of which were named on Donald Trump’s list.
“This is an unprecedented policy shock,” stated Alicia Carter, Chief Global Strategist of Lonsdale Markets. “If retaliatory tariffs emerge as a response, their effects could be far-reaching and lasting.”
Industries highly dependent upon global supply chains, like automotive, tech and consumer goods were hit particularly hard. Apple Inc., General Motors and Walmart all saw their stocks plunge between 4-6% during early trading.
World Trade Organization (WTO) officials expressed alarm over unilateral measures by various governments, and called for dialogue. According to Ngozi Okonjo-Iweala, Director-General of WTO: “Trade should be governed by rules and cooperation rather than threats… We encourage restraint and multilateral engagement.”
EU officials in Brussels hinted at possible retaliatory measures: “We won’t stand idly by if European businesses are unfairly targeted,” stated EU Trade Commissioner Valdis Dombrovskis. The EU will respond proportionately and according to WTO rules.
China recently issued a direct warning to Washington, urging U.S. policymakers not to make “irrational economic decisions” that could damage both nations and destabilize global trade.
Although Trump does not hold official authority to implement tariffs at this stage, analysts warn that his influence in economic discourse and lead in primary polls could push other politicians toward adopting more protectionist stances heading into election season.
“Markets are reacting not just to Donald Trump’s announcement–they are pricing in his possible return and its possible effect on volatility,” noted Andrew Kim, senior economist of Pax Global Advisors. This uncertainty is fuelling volatility.
At present, the Biden administration has not responded directly to Trump’s statement; however, several members of Congress have voiced concerns over any potential negative repercussions of it.
With global markets currently experiencing volatility and trade partners signaling their intention to respond with trade retaliations measures, economists say the next few weeks could prove decisive in shaping international commerce in years to come.