Donald Trump stated that foreign governments will have to pay “a lot of money” to lift the sweeping tariffs he described as “medicine,” as markets in Asia plummeted in early trading on Monday.
Speaking to reporters on Air Force One late on Sunday, the US president indicated he was not concerned about market losses that have already erased nearly $6tn in value from US stocks. “I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said.
Japan’s benchmark Nikkei 225 index tumbled nearly 9% in early trading on Monday, as concerns over a tariff-induced global recession continued to impact markets.
The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023.
In South Korea, trading on the Kospi index was halted for five minutes at 9.12am as stocks plummeted.
The Taiwan stock exchange stated early on Monday that they would implement additional policies to stabilize markets if there were “irrational falls”. Australian shares were also significantly lower.
Trump said he had spoken to leaders from Europe and Asia over the weekend, who hope to convince him to lower tariffs that are up to 50% and set to take effect this week. “They are coming to the table. They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis,” Trump said.
Trump’s tariff announcement last week jolted economies worldwide, triggering retaliatory levies from China and fears of a global trade war and recession. His top economic advisers portrayed the tariffs as a strategic reorientation of the US in global trade and sought to downplay the economic impacts from last week’s volatile rollout.
Treasury Secretary Scott Bessent stated that over 50 nations had initiated negotiations with the US since last Wednesday’s announcement, expressing that the strategy would provide maximum leverage for Trump. Neither Bessent nor the other officials disclosed the countries involved or details about the negotiations, yet this approach could pose logistical challenges and prolong economic uncertainty.
Bessent asserted there was “no reason” to anticipate a recession, citing the stronger-than-expected US jobs growth last month before the tariffs were announced.
JP Morgan economists now forecast the tariffs will result in a full-year decline of 0.3% in US gross domestic product, down from an earlier estimate of 1.3% growth, with the unemployment rate expected to increase to 5.3% from 4.2%.
US customs agents began collecting Trump’s unilateral 10% tariff on all imports from many countries on Saturday. Higher “reciprocal” tariff rates of 11% to 50% on individual countries are set to take effect on Wednesday at 12.01am EDT (4.01am GMT).
Some governments have signaled a willingness to engage with the US to avoid the duties. British Prime Minister Keir Starmer announced plans to support key British industries affected by the tariffs.
Taiwan’s President Lai Ching-te offered zero tariffs as the basis for talks with the US, pledging to remove trade barriers. Israeli Prime Minister Benjamin Netanyahu sought a reprieve from a 17% tariff during a meeting with Trump.
The worst week for US stocks since the onset of the Covid-19 crisis has left markets braced for another week of potential turmoil, with significant impacts on retirement funds.
White House economic adviser Kevin Hassett denied that the tariffs were part of a Trump strategy to crash financial markets to pressure the US Federal Reserve to cut interest rates.
Trump shared a video on social media that suggested his tariffs aimed to depress the stock market, igniting global debate on whether the policy was a permanent regime or a negotiating tactic.
With Reuters
