Trump’s ‘Medicine’ Tariffs Shake Global Markets: Recession Fears Mount as Stock Losses Top $10 Trillion

Global financial markets are reeling following U.S. President Donald Trump’s announcement of sweeping new tariffs, sparking widespread investor panic and raising fears of a prolonged global economic downturn. The week opened with a dramatic sell-off across Europe and Asia, while U.S. markets flirted with bear market territory during pre-market trading.

Oil prices slumped and futures for all major U.S. indices pointed downward — Nasdaq futures dropped a staggering 5.3%, while the S&P 500 and Dow Jones Industrial Average fell 3.4% and 3.1%, respectively. The massive retreat in risk assets follows a week of economic whiplash triggered by retaliatory tariffs from China and Trump’s aggressive rhetoric toward America’s trading partners.

Trump Defends Tariffs as “Medicine” Amid Market Chaos

Speaking aboard Air Force One, Trump remained defiant despite markets shedding nearly $6 trillion in value since his announcement. “I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said, signaling no retreat from tariffs that are set to rise as high as 50% on select nations starting this week.

In a show of economic brinkmanship, Trump insisted foreign governments will need to pay “a lot of money” annually to avoid the harsh levies, framing the move as a necessary corrective for America’s trade deficits — a rationale economists widely dispute. “They are coming to the table. They want to talk,” Trump said, though he emphasized negotiations would only happen on U.S. terms.

The tariff shock has prompted urgent responses from nations around the world. South Korea and Pakistan are dispatching trade delegations to Washington, while Taiwan has offered to eliminate all tariffs in exchange for a bilateral deal. Israel’s Prime Minister Benjamin Netanyahu is seeking an exemption from a 17% duty on Israeli exports, and Indian officials have quietly begun talks, despite facing a 26% levy.

In Europe, German Economy Minister Robert Habeck denounced the tariffs as “nonsense” upon arriving at an EU trade meeting in Luxembourg. “We must stand united. The U.S. is not negotiating from a position of strength,” Habeck said, calling for a firm collective response from the European Union.

Wall Street is bracing for deeper losses, with JPMorgan Chase raising the probability of a U.S. and global recession to 60%, up from 40% just days ago. CEO Jamie Dimon, in his annual letter to shareholders, issued a stern warning: “The quicker this issue is resolved, the better — because some of the negative effects increase cumulatively over time and would be hard to reverse.”

JPMorgan now forecasts a sharp deceleration in U.S. GDP growth, revising its full-year estimate down from 1.3% to just 0.3%. The firm also predicts the unemployment rate could climb to 5.3%, up from the current 4.2%, as business investment slows and consumer confidence wanes.

Top White House officials appeared on Sunday news shows in a bid to contain the fallout. Treasury Secretary Scott Bessent claimed over 50 countries had opened negotiations since the tariff announcement. “He’s created maximum leverage for himself,” Bessent said on Meet the Press, though he declined to name the countries involved or provide specifics.

Meanwhile, economic adviser Kevin Hassett denied rumors that the administration was using tariffs to manipulate markets and pressure the Federal Reserve to cut interest rates. Still, speculation grew after Trump shared a video on social media suggesting the tariffs were a strategic move to force lower borrowing costs.

With tariffs already in effect on many goods and higher rates scheduled to kick in at 12:01 a.m. ET on Wednesday, markets appear poised for further volatility. The S&P Composite 1500 Index has lost nearly $10 trillion in market value since mid-February, dealing a heavy blow to retirement portfolios and pension funds.

As governments scramble to shield their economies and Trump doubles down on his strategy, the world watches anxiously. Whether the tariffs are a temporary negotiating tool or the foundation of a new protectionist era remains uncertain — but the economic aftershocks are already being felt across the globe.