Trump's New Tariff Strike on 80 Countries: Asian Markets Collapse, Oil at $100

Donald Trump's decision to impose sweeping new tariffs on over 80 nations has escalated global trade war tensions, triggering a massive selloff across Asian equity markets, while geopolitical strife reignites concerns over energy supply.

Asian Markets Face Brutal Selloff

As investors grapple with the implications of the new trade measures announced by the US President, major indexes across Asia suffered steep declines:

■Hong Kong's Hang Seng index plummeted by a staggering 11.4%, marking a record session drop.

■South Korea's chip-heavy Kospi index took a brutal 6.2% hit as tech sentiment soured.

■Japan's Nikkei 225 shed 3.1%, while China's SSE Composite fell by 1.4%.

■The selloff was compounded by fears over AI spending and a slump in major US tech names, following Tesla's lower-than-expected profits.

Escalation of Trade Levies and European Exposure

The Washington administration announced fresh tariffs ranging from 10% to 12.5%, effectively replacing the blanket 10% levy imposed in February. This new regime targets the United Kingdom, Mexico, Canada, Australia, India, China, and the 27 countries of the European Union.

Bank of France Governor Emmanuel Moulin commented on the situation, stating that while Trump should adhere to the terms of the 2025 trade deal, the new levies introduce significant uncertainty. "For Europe, it ought not to change much... but obviously, it creates more uncertainty for world trade and clearly it’s not favourable for growth," Moulin noted.

Geopolitical Tensions Inflate Energy Costs

Volatility in oil prices persists, with Brent crude trading around $99.8 a barrel. While prices slipped by 0.9% this morning, they remain up by more than 10% over the course of the week.

■Threats by Yemen’s Houthi militias against Saudi oil exports via the Bab al-Mandab strait are raising fears of a new front in the energy crisis.

■Renewed conflict in the Middle East continues to fuel fears around global supply disruptions.

From my perspective as Defne Aydın, these tariff policies pose a significant risk of second-round effects on Eurozone inflation. Rising trade barriers and escalating energy costs could complicate the European Central Bank's (ECB) efforts to bring inflation down to the %2 target. The downward flexibility in the interest rate path may loosen due to such external shocks, potentially prolonging the process of policy normalization.