Global stock markets plummeted on Monday in response to President Trump's suggestion that new tariffs would affect all countries, rather than just those with large trade imbalances. With the impending tariffs announcement dubbed 'Liberation Day,' fear of a trade war contributed to declines in major indices across Asia and Europe. Japan's Nikkei dropped 4%, while the UK's FTSE 100 fell 1.3%. Concern over rising inflation and eroding consumer confidence has prompted Goldman Sachs to raise US recession probability estimates to 35%. Investors sought refuge in gold, pushing prices to a record high.
The tariffs imposed by the US government and the fear of new announcements as early as Wednesday are creating a bleak atmosphere on trading floors worldwide.
Trump told reporters on Air Force One: You'd start with all countries. Essentially all of the countries that we're talking about.
Economists fear that adding tariffs on imported goods will push up US inflation as importers pass on costs to customers, and also hurt confidence.
Goldman Sachs has now raised its estimate for the probability of a US recession during the next 12 months to 35%, up from 20% previously.
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