New York - Arab Canada News

The indicators of the American and global financial markets witnessed sharp declines today, Thursday, following President Donald Trump's announcement of a wide range of tariffs on several key trading partners, in a move that heightened investors' fears of an escalating global trade war.

Collective decline in market indices:

The Dow Jones Industrial Average fell by more than 600 points in a single session.

The Nasdaq lost more than 2.5%.

The European and Asian markets closed with sharp declines ranging from 1.8% to 3.4%, notably in the stock exchanges of London, Tokyo, and Frankfurt.

Reasons for the drop

The collective market decline came after Trump announced on Wednesday evening the imposition of tariffs of up to 34% on imports from countries including China, the European Union, Canada, and Mexico, under the “reciprocal treatment” policy, which aims - according to the American president - to put an end to the exploitation of the American economy.

Trump stated in his remarks:

“America has been economically exploited for years. Today we regain control, even if it means facing short-term challenges.”

Fears of broader repercussions

Investors fear that these measures will lead to:

A contraction in global trade volume.

Higher costs for American consumers.

Disruptions in global supply chains.

A potential economic recession if reciprocal responses come from trading partners.

The chief analyst at Morgan Stanley stated that “markets are not only concerned about the content of the tariffs, but also about the possibility of them turning into a permanent and extended policy that restricts global growth.”

Canada is watching... and China threatens countermeasures

For its part, Canada is closely monitoring developments, while China has announced its strong opposition to the tariffs, affirming that it will respond with countermeasures to protect its interests.

Summary:

While the Trump administration seeks to impose new rules on trade, global markets are experiencing a state of panic and uncertainty regarding the near economic future, increasing pressure on governments and companies to take precautionary steps in response to what seems to be the widest trade escalation in two decades.