Lagatar24 Desk
New Delhi: Global financial markets plunged following a new wave of trade tariffs imposed by U.S. President Donald Trump, sparking fears of recession and inflation. Despite the turmoil, Trump doubled down on his stance, claiming that oil, food prices, and interest rates were down and there was “no inflation.”
Posting on his social media platform Truth Social, Trump wrote, “Oil prices are down, interest rates are down (the slow-moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in billions of dollars a week from the abusing countries on tariffs that are already in place.”
Targeting China, Trump called it “the biggest abuser of them all” after Beijing retaliated with 34% counter-tariffs on U.S. goods. China also announced plans to sue the U.S. at the World Trade Organization and limit exports of rare earth elements essential to advanced technologies.
Responding to China’s reaction, Trump claimed, “China played it wrong, they panicked — the one thing they cannot afford to do!” He asserted that the tariffs would pressure foreign countries into renegotiating trade deals and encourage manufacturing within the U.S.
While Trump maintained his bullish tone, U.S. Federal Reserve Chair Jerome Powell warned that the escalating tariff war would likely push inflation higher and reduce economic growth. “It is now becoming clear that the tariff increases will be significantly larger than expected,” Powell said at an event in Virginia.
Calling on Powell to act, Trump wrote in all caps, “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates… CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”
Despite Trump’s pressure, Powell indicated no immediate changes to the Fed’s monetary policy, noting that while inflation remains above the 2% target, it’s too early to shift interest rate levels currently ranging between 4.25% and 4.50%.
Markets in Turmoil Asian and European stock markets reeled under the economic shockwave. European exchanges opened with heavy losses: Paris fell over 6%, London nearly 6%, Amsterdam and Oslo over 5%, and Milan by more than 3%.
In Asia, Japan and Taiwan’s markets temporarily halted trading due to circuit breaker mechanisms triggered by excessive sell-offs. Japan’s Nikkei 225 futures dropped more than 8% early in the session.
Indian markets also suffered a sharp crash. The Bombay Stock Exchange saw the Sensex drop by 3,939.68 points or 5.22% to 71,425.01, while the Nifty fell 1,160.8 points or 5.06% to 21,743.65. Investors reportedly lost Rs 20.16 lakh crore in wealth during early trading.
