On Monday, Asian markets faced significant turmoil as they sought comparisons to a historic drop, following President Donald Trump’s assertion that the U.S. required “medicine” to address its persistent trade deficit. This assertion came amidst the implementation of his “Liberation Day” tariffs, which triggered a substantial decline in market performance.
Questions arose about the severity of Monday’s market downturn, prompting comparisons to previous financial crises. By mid-afternoon local time, the Hang Seng Index in Hong Kong had plunged approximately 12.5%, marking its steepest decline since 2008 and almost negating its gains for 2025. Tencent, the most valuable company in China, suffered a drop exceeding 12%, while Lenovo’s shares tumbled over 22%, marking the largest decline for any Global 500 company in the Asia-Pacific region.
In China, the CSI 300 index, which includes companies traded in Shanghai and Shenzhen, fell by 7.1%, reflecting widespread impact across the region. In Japan, the Nikkei 225 dropped by over 7.8% on Monday, marking its third consecutive day of significant losses since Trump’s announcement of 24% tariffs against the country. South Korea’s KOSPI index decreased by 5.6%, and Australia’s S&P/ASX 200 saw a decline of 4.2%. Meanwhile, India’s NIFTY 50 dropped approximately 4.5% by early afternoon, local time.
Taiwan was forced to halt trading as declines triggered the exchange’s circuit breaker shortly after markets opened. The TAIEX index fell by 9.7%, while TSMC, Asia’s most valuable company, saw its market value diminish by $74 billion with a 10% drop. By mid-afternoon, Singapore’s Straits Times Index had decreased by around 8%, with DBS, the largest bank in Southeast Asia, experiencing a decline of over 9.5%. This drop closely approached the Straits Times Index’s record 8.3% decline during the 2008 Global Financial Crisis.
Market sentiment was expected to negatively impact the U.S. markets as well, with S&P 500 futures down by 4.9% and Nasdaq 100 futures falling by 5.6%, suggesting an impending bear market in the U.S.
On Sunday, Trump had expressed a desire for the U.S. trade deficit to be resolved in any deal with China, dismissing investor concerns that had recently led to a 10.5% drop in the S&P 500. Trump stated that despite not wanting markets to decline, necessary “medicine” was needed to address the issue. Commerce Secretary Howard Lutnick confirmed that there would be no delay in the implementation of the tariffs. Treasury Secretary Scott Bessent added that over 50 nations had approached the U.S. for negotiations, indicating Trump’s strategy had created substantial leverage for a deal.
Several Asian economies, including Vietnam, Taiwan, and Cambodia, have proposed reducing tariffs on U.S. imports. Nonetheless, senior trade advisor Peter Navarro indicated that this alone would not satisfy the administration, citing concerns over non-tariff related trade practices.
Monday also marked the first trading day since China imposed a retaliatory 34% tariff on all U.S. imports, which will take effect on April 10, in response to Trump’s tariffs. China also implemented export controls on rare earth minerals and launched new anti-monopoly investigations into U.S. industries, adding several companies to its “unreliable entities” blacklist. Despite the prospect of U.S. tariffs potentially reducing China’s GDP growth by 1.5 percentage points, economists believe China is prepared for another trade conflict with Trump. Beijing is set to stimulate domestic consumption and explore new markets beyond the U.S. as countermeasures.
Countries such as Australia and Singapore have expressed disappointment but are refraining from retaliatory measures for the time being. Conversely, nations like the Philippines perceive lower U.S. tariffs as an opportunity to capture market share from competitors. Japan and South Korea plan to reach out to the U.S. to negotiate a reduction in tariff rates, with Japan’s Prime Minister Shigeru Ishiba insisting on the country’s fairness in trade practices.
