On Monday, Asia was deeply engaged in efforts to find parallels to an unprecedented market drop following President Donald Trump’s assertion that the U.S. required “medicine” to address its ongoing trade deficit. This statement was made even as his “Liberation Day” tariffs caused a significant downturn in the market.
Questions arose regarding whether this market decline was the most severe since the COVID-19 pandemic, the Great Financial Crisis of 2008, or perhaps the most significant ever for certain markets. As of mid-afternoon local time, Hong Kong’s Hang Seng Index fell by approximately 12.5%, marking its steepest decline since 2008 and nearing the erasure of its gains for 2025. Tencent, the most valuable company in China, saw a decrease of over 12%, while Lenovo experienced a more than 22% drop, representing the largest decline by a Global 500 company based in the Asia-Pacific region.
China’s CSI 300 Index, which monitors companies listed in Shanghai and Shenzhen, fell by 7.1%. The negative effects reverberated across the region, with Japan’s Nikkei 225 plunging more than 7.8% on its third consecutive day of losses since Trump announced 24% tariffs against Japan. Similarly, South Korea’s KOSPI dropped by 5.6%, and Australia’s S&P/ASX 200 fell 4.2%. In India, the NIFTY 50 decreased by around 4.5% as of early afternoon local time.
Taiwan ceased trading after market declines triggered the exchange’s circuit breaker almost immediately following the market’s opening. The TAIEX index fell by 9.7%, and TSMC, Asia’s most valuable company, saw a 10% drop, which equated to a $74 billion reduction in its market value within minutes.
As of mid-afternoon local time, the Straits Times Index in Singapore had decreased by about 8%, with DBS, Southeast Asia’s largest bank, falling by over 9.5%. This drop in the STI is nearing the record 8.3% decline from 2008 during the Global Financial Crisis. The negative sentiment was expected to carry over to the U.S. markets, with S&P 500 futures down 4.9% and Nasdaq 100 futures down 5.6%, indicating a potential bear market for the U.S.
President Trump addressed reporters on Sunday, expressing that he wanted the U.S. trade deficit “solved” as part of any deal with China. He dismissed investor concerns that had resulted in a 10.5% drop for the S&P 500 since April 2. Trump conveyed confidence, stating, “Forget markets for a second—we have all the advantages.” Commerce Secretary Howard Lutnick, during an appearance on CBS News’s “Face the Nation,” indicated that there would be no delay in implementing tariffs.
Messages from the Trump administration were sometimes inconsistent. On NBC’s “Meet the Press,” Treasury Secretary Scott Bessent mentioned that over 50 nations had sought negotiations with the U.S., remarking that Trump had established “maximum leverage” for a deal. Several Asian economies, including Vietnam, Taiwan, and Cambodia, have decided to reduce or eliminate tariffs on U.S. imports. Senior trade advisor Peter Navarro, however, indicated that simply eliminating tariffs would not be enough to satisfy the administration, citing non-tariff issues as a concern.
Monday also marked the first trading day following China’s decision to impose a 34% tariff on all U.S. imports as a countermeasure to Trump’s “Liberation Day” tariffs. China’s retaliatory actions are set to commence on April 10, coinciding closely with the start of Trump’s tariffs. Beijing also enacted export controls on certain rare earth minerals, initiated new anti-monopoly investigations into U.S. industries, and added several companies to its “unreliable entities” list.
According to HSBC, the U.S. tariffs could potentially reduce China’s GDP growth by 1.5 percentage points, particularly affecting sectors reliant on the U.S. consumer market. Nonetheless, experts believe that China is well-prepared for another trade conflict with Trump. Efforts are expected to focus on stimulating domestic consumption and exploring new markets beyond the U.S., with an emphasis on making consumption a major driver of economic growth.
Other nations, such as Australia and Singapore, have expressed disappointment but are refraining from immediate retaliatory actions. In contrast, countries like the Philippines view the relatively lower U.S. tariffs as an opportunity to gain market share. Japan and South Korea are planning to request that the U.S. reduce the tariff rates, with Japan’s Prime Minister Shigeru Ishiba indicating that their country needs to demonstrate fairness in their trade practices.
