Asia Experiences it’s Own “Black Monday” Level Crash as Trump Stands His Ground

Whenever people start drawing comparisons to historical market crashes, it's usually a sign that something serious is going on. This morning, some analysts began calling it Black Monday (though to be fair, the Dow’s 2% drop doesn’t exactly match the 22% collapse seen on the real Black Monday back in 1987). That said, what happened across Asian markets today is still one of the worst regional selloffs in decades.

Across the Asia-Pacific region, losses piled up fast. Hong Kong’s Hang Seng Index dropped 13.22%, marking its sharpest single-day fall since 2008. The Hang Seng Tech Index fell even further… down 17.16%. The Shanghai Composite closed 7.3% lower, while Japan’s Nikkei 225 lost 7.83%, bringing it to an 18-month low. Taiwan’s Weighted Index plunged 9.7%, its biggest one-day loss on record. As you can see, it was far worse than a bad day. It was a historic one.

Even worse, this selloff wasn’t triggered by earnings misses or weak consumer data… it was policy-driven (you already know the answer).

Last week, former President Donald Trump announced sweeping new tariffs ranging from 10% to as high as 54% on imports from nearly every major trading partner. Some of the largest levies were directed at key Asian exporters… China was hit with 54%, Vietnam with 46%, Bangladesh with 37%, and U.S. allies Japan and South Korea faced 26% tariffs. Even nations like Singapore, New Zealand, and Australia are now subject to a baseline 10% tariff (pretty much put your finger on any country on the globe and Trump’s upping the ante on them).

Trump accused countries like Vietnam of taking advantage of the U.S. and called the tariffs a necessary correction. But the economic fallout has been immediate (especially in Asia, where economies are heavily reliant on exports to the U.S).

With many Asian markets closed for holidays on Friday, today's session was their first opportunity to react to the news… and the results tell us how they really feel across the pond. The MSCI Asia Pacific Index fell as much as 8.5%, its steepest drop since the global financial crisis in 2008. Jun Bei Liu, founder of Ten Cap Pty Ltd, described the mood as “proper capitulation,” adding that selling pressure extended across every sector, not just those directly impacted by trade.

The impact wasn’t limited to Asia either. In Europe, the FTSE 100 lost nearly 5%, its largest single-day decline in five years, with similar drops recorded across major German and French indexes.

You know how Wall Street is, more reactionary than predictive. Case in point: Goldman Sachs has now raised its odds of a U.S. recession to 45%, up from 35% prior to the tariffs. JPMorgan took it even further, putting the odds of a global economic downturn at 60%. And according to Schroders, the U.S. tariff rate is about to go from 7.7% to 25.3%, which they say could knock almost 1% off U.S. GDP and raise consumer prices by 2% (great, just what we needed… more $7 cereal and $19 paper towels).

Countries that actually make the stuff we buy (like Vietnam, China, and Bangladesh) are expected to feel the pain fast, with GDP losses expected to top 0.5%. In the meantime, the European Union’s getting ready to fire back with its own set of countermeasures. China’s already hit back. And even with markets throwing a fit, Trump’s economic team is standing their ground… saying the tariffs are “necessary” and not going anywhere anytime soon.

If you were looking for a good time to enter the markets or lower your cost per basis, you owe Trump a big “thank you.”

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Stock.News has positions in Goldman Sachs, JPMorgan, and Schroders.