Tariffs: Stock markets plunge in Europe and Asia. Trump says, “Sometimes you need to take medicine to fix something”

Brussels – US tariffs continue to undermine the stability of stock markets around the world. After US President Donald Trump defined the global stock market shock a necessary “medicine” for US growth last night, this morning (April 7), first in Asia and then in Europe, stock exchanges started to free fall, following the slump that began with the April 2 announcement of US tariffs on the rest of the world.

European financial markets opened the week sharply lower​ after closing April 4, the worst week since March 2020. Following Friday’s plunge on Wall Street, which wiped out $5 trillion in value from global stock markets and Asian stock markets over Trump’s tariffs, European stock markets again plummeted: Frankfurt’s Dax lost 10 percent, Paris’ CAC 40 6.6 percent, Milan’s FTSE Mib index 7.6 percent. London was also sharply down, losing 5.2 percent, as was Madrid (-4.66 percent). The UK financial market seems to be holding up better, thanks to the lower tariffs ( 10 percent). In three hours of trading, 890 billion euros were lost​. The Eurostoxx 50 index, which covers the 50 largest European companies, is set to fall about 4 percent to its lowest point in 16 months. Germany’s Deutsche Bank has already warned its clients, while Swiss-based Swissquote Bank spoke of a “bloodbath.”

Particularly in Milan, overwhelmed by the wave of selling in the wake of US tariffs, bank shares slumped on the stock market: the FTSE Mib lost 7.6 percent to 32,050 points with losses above 12 percent for BPER and Popolare Sondrio, 11 percent for Monte dei Paschi di Siena, 10 percent for Banco BPM and UniCredit. Fineco lost 8.7 percent, Mediolanum 9.7 percent, and Intesa Sanpaolo 9 percent. Among stocks that have started trading, Generali is losing 7 percent, Ferrari 7.95 percent, and Eni 6.9 percent.

Asian markets, where this morning’s storm began, saw Shanghai open down nearly 4.5 percent and close over 7.3 percent lower, and Tokyo down more than 7.8 percent in closing, while Seoul recorded its worst session since August 2024 (-5.6 percent). The Taiwan Stock Exchange posted the worst loss ever reported by the Taipei list, closing down 9.7 percent and with the Taiex index burning 2,065 points. Notably, the Island had already announced that it would not respond to US tariffs with additional ones.

  In the wake of Chinese counter-tariffs at 34% in response to Trump’s tariffs on Made-in-China goods (also at 34 percent), the Hong Kong stock market plunged as never since the 1997 crisis, with the Hang Seng Index giving up 13.22 percent and banking and technology stocks heavily hit. As tensions rose, Beijing called for negotiations with Washington. Chinese Foreign Ministry spokesman Gue Jiakun reiterated on Facebook over the weekend: “It’s time for the US to stop acting wrongly and resolve differences with trading partners through equal consultation.” This morning, another spokesman made evident China’s irritation, raising the tone: “The US is seeking hegemony in the name of reciprocity, sacrificing the legitimate interests of all countries to serve its own selfish interests and prioritizing America over international rules. It is typical of unilateralism, protectionism, and economic bullying. Threats and pressure are not the best way to negotiate with China.”

 In the United States, investors began blaming President Trump for the tariff disaster, from Bill Ackman to Stanley Druckenmiller, pointing out the risk of inflation and economic decline and calling for Federal Reserve intervention. On Wall Street, the VIX index (also known as the “fear index”), which measures market volatility and uncertainty, nearly doubled this morning, standing at 60 points (the highest level since the outbreak of the Pandemic in 2020). Still collapsing are cryptocurrencies in the United States, where Bitcoin has almost completely erased the gains made since Donald Trump’s election victory in early November. The total capitalization of all cryptocurrencies fell 10 percent to $2.54 trillion, according to CoinGecko data. Ethereum slumped to $1.5, an intraday low since October 2023.