Market panic deepens as Trump stands firm over tariffs

Stock markets and oil prices collapsed further on a black Monday for markets as US President Donald Trump stood firm over his tariffs despite recession fears.

Trading floors across Asia and Europe were overcome by waves of further selling after last week's sharp losses. Hong Kong's drop of 13.2 percent Monday was its worst in nearly three decades.

Trillions of dollars have been wiped off combined stock market valuations in recent sessions. 

Taipei stocks suffered their worst fall on record Monday, tanking 9.7 percent, while Frankfurt dived as much as 10 percent and Tokyo closed down by almost eight percent. Hong Kong's loss was exaggerated as the index had been closed Friday for a public holiday.

Wall Street futures suffered another drubbing, while bitcoin tumbled. The dollar was steadier after sharp losses last week.

"The carnage in global equity markets has continued," noted Thomas Mathews, Asia Pacific head of markets at Capital Economics. He said Trump could still pare back his tariffs. "But, if he doesn't, equities could get a lot sicker yet."

A 10-percent "baseline" tariff on imports from around the world – including Argentina –  took effect on Saturday but a slew of countries will be hit by higher duties from Wednesday, with levies of 34 percent for Chinese goods and 20 percent for EU products.

Countries mostly have been scrambling to blunt the new US tariffs without retaliating, but Beijing is responding in kind, escalating the trade war between the world's two biggest economies.

Beijing announced last week its own 34-percent tariff on US goods, which will come into effect on Thursday.

EU trade ministers gathered in Luxembourg on Monday to discuss the bloc's response, with Germany and France having advocated a tax targeting US tech giants.

"We must not exclude any option on goods, on services," said French Trade Minister Laurent Saint-Martin.

The 27-nation bloc should "open the European toolbox, which is very comprehensive and can also be extremely aggressive", he said.

Hopes that the US president would rethink his policy in light of the turmoil were dashed Sunday when he said he would not make a deal with other countries unless trade deficits were solved.

"Sometimes you have to take medicine to fix something," he said of the ructions that have wiped trillions of dollars off company valuations.

Wall Street's three main indices dived almost six percent Friday.

Monday's savage selling was across the board, with no sector spared. Tech firms, carmakers, banks, casinos and energy firms all felt the pain as investors abandoned riskier assets.

Sydney, Wellington, Manila and Mumbai were also deep in the red, while London and Paris both dropped nearly four percent in midday deals. Milan and Madrid each shed more than four percent, with all sectors also affected across Europe.

Concerns about future energy demand saw oil prices sink about three percent, having dropped some seven percent Friday. Both main contracts are now sitting at their lowest levels since 2021. 

The Kremlin said it was monitoring the plummeting price of oil – on which Russia's economy is highly dependent.

Trump on Sunday doubled down on his demand to slash deficits with trading partners, saying he would not cut any deals unless that was resolved.

"Sometimes you have to take medicine to fix something," said Trump, whose administration has shrugged off the market panic.

He told reporters aboard Air Force One that world leaders were "dying to make a deal."

– TIMES/AFP