 "Trump reciprocal tariff wipes $6.6 trillion from US markets in two days")
The financial world has been rocked by an unprecedented market collapse following President Donald Trump’s aggressive trade policies, which have effectively formed economic barriers between the United States and its global partners. Over the two days, the US stock market suffered a steep decline, wiping out approximately $6.6 trillion in market value, according to The Wall Street Journal.
Reuters reported that the S&P 500 alone has lost around $5 trillion in market capitalisation during this period.
On April 4, the Dow Jones Industrial Average plummeted by 5.5 per cent, marking a two-day decline of over 4,000 points, including a staggering 2,200-point drop in a single day. The S&P 500 followed suit, shedding nearly 6 per cent, while the tech-heavy Nasdaq tumbled 5.8 per cent, officially plunging into bear market territory. The ripple effects were felt worldwide, with Germany’s DAX and France’s CAC 40 experiencing steep losses. Oil prices sank to their lowest levels since 2021, and copper prices also fell, reflecting growing concerns over the global economy. Additionally, Japan’s Nikkei slumped by 2.8 per cent.
The impact extended beyond the United States. In India, the stock market suffered heavy losses, erasing approximately ₹9 trillion in value. The BSE Sensex closed at 75,364.69, dropping 930.67 points (1.22 per cent), while the National Stock Exchange (NSE) Nifty 50 fell by 345.65 points (1.49 per cent), ending at 22,904.45.
China retaliates, global trade war intensifies
China, one of the primary target of Trump’s sweeping tariff policies, swiftly responded with harsh countermeasures. Beijing matched Washington, announcing a 34 per cent tariff on all US imports, set to take effect on April 10. Fear of a prolonged trade war have further intensified as China plans to file a complaint with the World Trade Organization and halt rare earth exports. These are critical materials that are used in electronics and medical devices.
Other key US trading partners, however, are weighing their responses. The European Union, which faces a 20 per cent tariff, stated it would adopt a “calm and unified” approach. Japan, impacted by a 24 per cent tariff, urged restraint, with Prime Minister Shigeru Ishiba emphasising a “level-headed” response. South Korea’s acting president called for urgent negotiations with Washington, while Bangladesh is preparing to send a formal appeal to the United States Trade Representative (USTR) against what it described as an unjust 37 per cent tariff on its exports.
Meanwhile, India is currently engaged in bilateral trade negotiations with the Trump administration. Indian exporters are holding their breath to see if trade talks could provide some relief.
US recession fears rise amid market chaos
JPMorgan Chase & Co has sounded the alarm, forecasting a US recession as a direct consequence of the new tariffs. Analysts predict that the increased cost of imports and retaliatory measures from key trading partners will stifle economic growth, disrupt supply chains, and erode consumer purchasing power.
Goldman Sachs clients take ‘wait-and-see’ approach
Despite the market turbulence, not all investors are fleeing. Goldman Sachs Asset Management’s (GSAM) senior client investment strategist Elizabeth Burton noted that clients remain in a “wait-and-see” mode rather than pulling out of US equities entirely.
“We’re getting a lot of inquiries, but not a lot of dollars are flowing out,” Burton was quoted by Business Insider, suggesting that many long-term investors still believe in the resilience of US markets despite the current uncertainty.
However, with international stocks outperforming US equities in 2025, global investors are reassessing their strategies. Burton acknowledged that while some expect the US to ultimately weather the storm, others fear that the prolonged trade war could permanently alter the global economic landscape.